Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. International Organisations Act 1981
2. Merchant Shipping Act 1981
3. Parliamentary Commissioner (Consular Complaints) Act 1981
4. Water Act 1981
5. English Industrial Estates Corporation Act 1981
6. Public Passenger Vehicles Act 1981
7. National Film Finance Corporation Act 1981
8. Film Levy Finance Act 1981
9. Charterhouse Japhet Act 1981
10. Lloyds Bank Act 1981
11. Greater Manchester Act 1981
12. Allied Irish Banks Act 1981

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Passports

Mr. Brotherton: asked the Lord Privy Seal if he has any plans to amend the regulations governing the issue of United Kingdom passports.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Richard Luce): No, Sir.

Mr. Brotherton: Will my hon. Friend find time today to consider the extraordinarily unsatisfactory replies given to the House by the Lord Privy Seal, and by the Home Secretary when standing in for the Prime Minister, on the question of a so called Euro-passport? Will my hon. Friend tell the House when it is intended to introduce the Euro-passport, and why it is intended to introduce it? Will the Euro-passport take the place of the United Kingdom passport? If so, will the House have a chance to debate the matter and, indeed, to vote on it?

Mr. Luce: My hon. Friend calls it a "so-called Euro-passport". It will remain a British passport. I assure my hon. Friend that, as my right hon. Friend has already made absolutely plain, the House will have an opportunity to debate the format of the passport before any changes are made.
I should like to reinforce to my hon. Friend the fact that the change will be made only when we are satisfied that

we can make the change to what we would call a machine-readable passport, which will bring benefits to people who are travelling in and out of this country because that should speed up the process of immigration and emigration.

Mr. English: I am sure that the hon. Gentleman is aware that a large number of hon. Members are entitled to hold both United Kingdom and Republic of Ireland passports, being citizens of both countries. I hope, therefore, that when we have the new system the Government will stop the silly practice of depriving people of their British passports whilst they hold their Irish ones, or, for that matter, by good relations, the Irish Government depriving people of their Irish passports whilst they hold their British ones.

Mr. Luce: In general that is a matter for the Home Secretary, but I reinforce my statement that it will remain a British passport.

Mr. Cormack: To make it absolutely plain, will my hon. Friend spell out that this will be a British passport, that it will bear the name of Her Britanic Majesty, and that it will be blue and not burgundy, or even claret?

Mr. Luce: The passport will remain British, but there will be a common format once we have agreed it. Incidentally, it is proposed that it should be burgundy coloured—with something of the flavour of my hon. Friend's shirt,—which seems to be entirely suitable.

British Broadcasting Corporation (World Service)

Mr. Greville Janner: asked the Lord Privy Seal if he will consider proposals for the improvement of the audibility of the British Broadcasting Corporation world service programmes; and if he will make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. Nicholas Ridley): The Government attach great importance to the audibility of all the BBC's external broadcasts. To improve audibility, satellite feeds for the relay stations in the Eastern Mediterranean and the Middle East are being introduced, and four new transmitters are planned to be in service by mid-1982. An additional powerful medium-wave transmitter will start broadcasting from Orfordness in early 1982 and the BBC has eight transmitters ordered for another planned broadcasting station in the United Kingdom.

Mr. Janner: I welcome those improvements in the overseas audibility of the world service, but will the hon. Gentleman confirm that they will not affect the audibility of home broadcasts? Does he agree that although the audibility of overseas broadcasts is probably the greatest asset to our overseas relations, audibility at home is of great importance to vast numbers of people, including most hon. Members?

Mr. Ridley: I agree that there is great concern that the external services should be heard in this country. However, with respect, that is not the responsibility of the Foreign and Commonwealth Office. If it is felt that the material put out by the BBC's external services is suitable for home consumption, the BBC might decide to change its home broadcasts. Complaints on that score should be addressed to the BBC.

Mr. Peter Bottomley: Does my hon. Friend listen to the world service when he goes abroad? Is it more audible than Radio South Africa, the Dutch service or the Russian service?

Mr. Ridley: That depends on where one is. Last time that I listened to the world service overseas I heard a strident plea for fewer cuts in the BBC's external services programme.

Mr. Sproat: Is the Soviet Union still jamming overseas broadcasts by the BBC? If so, is that not a total and cynical contradiction of the pledges that it made under the Helsinki agreement? What does my hon. Friend propose to do about it?

Mr. Ridley: There has been serious and continuing jamming of the BBC's programmes. However we have increased the amount of air time and, despite jamming the BBC has managed to get its programmes heard more in Russia by means of various arrangements. Jamming is not at all within the spirit of the Helsinki agreement.

Yasser Arafat

Mrs. Renée Short: asked the Lord Privy Seal what representations he has had on the subject since it was disclosed that the Foreign Secretary may find it necessary to meet Yasser Arafat when President of the European Economic Community Council of Ministers.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): We have received a small number of letters.

Mrs. Short: I am grateful to the Minister for that illuminating reply. What does he intend to do to influence the Palestine Liberation Organisation to renounce the clauses in its national convenant, which the Foreign Secretary has described as unacceptable, and which call for the destruction of Israel? Prior to any meeting, should not the PLO be asked to renounce its intention to commit acts of violence against Israel?

Mr. Hurd: It is not so much a matter of amending constitutional documents, as of achieving a clear understanding that if the Israelis accept Palestinian self-determination, the Palestinians will recognise Israel's right to exist behind secure frontiers. Both sides must move. At an official level we have occasional contacts with the PLO, partly because we wish to make the point that the hon. Lady has made.

Mr. Walters: Does my hon. Friend agree that there will not be a satisfactory solution to the Middle East problem without a recognition of Palestinian rights? That is universally accepted. Is it not therefore sensible to talk to the effective representatives of the Palestinian people,. namely, the PLO? It would be easier if concessions were made by both sides.

Mr. Hurd: Concessions will have to be made by both sides if there is to be a negotiated settlement. Because of the support that the PLO enjoys on the West Bank, we believe that it will have to be associated with the negotiations. If they are to be fruitful, the PLO will have to change its public attitude to the State of Israel.

Mr. Clinton Davis: Does the Minister still wish to draw the distinction that his right hon. Friend the Lord Privy Seal sought to draw during the last Foreign Office

Question Time between entering into talks with the IRA and entering into talks with the PLO? In the light of the Fermanagh and South Tyrone by-election is it not a somewhat false distinction?

Mr. Hurd: The hon. Gentleman is trying to be a bit too clever. Anyone who knows anything about the situations on the West Bank and in Northern Ireland will deny that they are comparable.

Mr. Sainsbury: Is my hon. Friend aware that as recently as 9 April an official spokesman of the PLO said that he wished to make it clear, particularly to European countries, that the PLO's refusal to recognise Israel was an unchangeable and permanent policy? In the light of that statement, which is well verified, would it not be most unwise for the Foreign Secretary to meet the head of that organisation?

Mr. Hurd: I have seen that that quotation has been circulated by the Israeli embassy—[Interruption.] There is no objection to that.

Mrs. Short: Is it right?

Mr. Hurd: I have not been able to check it. However, there is a mass of such quotations from Palestinians about Israel and from Israelis about the Palestinians. They serve to show only that if there is to be any chance of a negotiated settlement all the parties must make very considerable shifts in their public attitudes.

Mr. Moyle: Has the hon. Gentleman seen reports to the effect that the Israelis would have been prepared to accept a United Nations' peacekeeping force in the Lebanon if that had been proposed? Will the Government consider welcoming that statement? If so, will they make inquiries into whether that represents a general review by the Israeli Government of their attitude to United Nations' peacekeeping forces? They might be prepared to accept such forces on the West Bank and in Sinai as part of an overall Middle East settlement.

Mr. Hurd: There is a lot of diplomatic activity about the Lebanon. Not all of it is clear. However, I understand that at this stage there is no proposal to have a United Nations' peacekeeping force in Beirut or in Zahle, where the recent fighting has been fiercest.
The right hon. Gentleman has made a correct general point. We hope that the Israelis will make life easier for the existing United Nations' force in South Lebanon—I am using rather mild phraseology in that respect—and that they will keep an open mind about forms of international peacekeeping that might contribute to an eventual Arab-Israeli settlement.

Cyprus

Mr. Thomas Cox: asked the Lord Privy Seal what plans he has to visit Cyprus.

The Lord Privy Seal (Sir Ian Gilmour): I visited Cyprus in April 1980, and have no plans for a further visit at present.

Mr. Cox: I note that reply. Is the right hon. Gentleman aware that, sadly, all the indications are that the inter-communal talks are again making little progress? As important issues are involved, such as the continuing occupation of part of Cyprus by Turkish troops and the unresolved question of missing Greek Cypriots, is it not


the time that the right hon. Gentleman made another visit to the island and clearly stated the Government's policy on its future and on those key issues?

Sir Ian Gilmour: I agree that the talks have not made much progress. However, I think that the hon. Gentleman will agree that they have taken place in a notably better atmosphere than that of the previous round of talks. I agree about the great importance of the issues that he mentioned. It is not surprising that the tempo of the talks is slowing down. As the hon. Gentleman knows, in the next two months there will be elections in both communities. It would not be right for Britain to take any unilateral action now. The hon. Gentleman keeps a close eye on such matters and, as he knows, we are offering every support to the United Nations in its endeavours.

Mr. Jim Spicer: My right hon. Friend will know that recently Mr. Denktash made a speech on behalf of the Turkish-Cypriot community in which he pledged its full support for the long-term future of sovereign base areas. Have we received a similar pledge from the Cyprus Government?

Sir Ian Gilmour: The Cyprus Government have not called in question our sovereign base areas. They are not an immediate issue and are not under threat. However, we all understand the meaning of the original question, namely, that we should press on towards achieving a comprehensive settlement in Cyprus.

Mr. Norman Atkinson: Does the Lord Privy Seal realise that it is nearly seven years since the invasion of Cyprus? Is it not a curious fact that neither Labour or Conservative Governments have made a major statement offering a solution to the problems in Cyprus, although Britain has an interest in sovereign bases there. Notwithstanding that, will the Lord Privy Seal say whether the Government believe that the Turkish Government should withdraw their troops from Cyprus, restore free movement to its people and bring about the reunification of the island on a sovereign basis?

Sir Ian Gilmour: I agree that it is seven years since those events took place. As the hon. Gentleman knows, events before that damaged the unity of the island. It is not surprising that neither Labour nor Conservative Governments have made high-sounding declarations. I do not think that that is the right way to solve the problem. We look forward to the day when there is a comprehensive settlement. That witll obviously include the wihdrawal of Turkish troops.

Raoul Wallenberg

Mr. Bendall: asked the Lord Privy Seal what response Her Majesty's Government had to inquiries made of the Soviet Union at the Madrid review conference concerning the fate of Raoul Wallenberg.

The Minister of State, Foreign and Commonwealth Office (Mr. Peter Blaker): The Soviet authorities have not yet responded to the appeal made by the Swedish delegation to the Madrid review conference, and supported by the British and other Western delegations, for a reinvestigation of the circumstances surrounding the disappearance of Raoul Wallenberg.

Mr. Bendall: Is my hon. Friend aware that on 13 January my right hon. and learned Friend the Member for

Hendon, South (Mr. Thomas) accompanied by the hon. and learned Member for Leicester, West (Mr. Janner) tried to present a petition to the Soviet embassy in connection with Raoul Wallenberg? The embassy refused to see them. In view of that, and in view also of the answer that my hon. Friend has given, what can the Government do to try to persuade the Soviet authorities to give more information about this courageous and well-respected man?

Mr. Blaker: I am sorry to say that the attitude of the Soviet authorities in this sad case has been consistently unhelpful. As my hon. Friend will understand, this is primarily a matter for the Swedish authorities. It would be wrong for us to try to usurp the lead from them. We have made it clear at the Madrid conference, and in other ways, that we shall do everything that we can to back up the Swedish authorities by supporting their representations. Also, we have told the Swedish authorities that we shall put them in touch with British subjects who may be able to help by giving evidence in support of the search.

Mr. Greville Janner: is the Minister aware that the Raoul Wallenberg family, whom I know well, are exceedingly grateful to Her Majesty's Government who, together with the Opposition, have made it clear to the Soviet authorities that this country will not rest or relax until this extremely brave and important man is either released from custody and is allowed to go home to his family and people or they produce acceptable evidence that he has died? Is the Minister aware that the present Soviet practice of maintaining silence is unacceptable to us all?

Mr. Blaker: I endorse everything that the hon. and learned Gentleman has said. I am grateful for his initial words. This is an all-party matter, and I agree with him especially about the brave actions of Raoul Wallenberg at the end of the Second World War.

Sir Bernard Braine: Does my hon. Friend agree that the persistent refusal of the Soviet Union to give information about the fate of Mr. Wallenberg—a hero if there ever was one, who intervened to save the lives of 100,000 Hungarian Jews who would otherwise have been consumed in the Nazi holocaust—underlines the callous and insensitive attitude of the regime to elementary human rights?
Does my hon. Friend agree also that in view of the continued imprisonment of such brave men and women as those in the Helsinki monitoring groups in the Soviet Union and the satellite states, and other prisoners of conscience, we in the West should never allow the oppressors to think that we shall forget the oppressed or cease to call for their release? Can my hon. Friend assure us that after his own firm stand at the Madrid conference the British Government will never flag in this regard?

Mr. Blaker: I endorse what my hon. Friend has said. Raoul Wallenberg was concerned with securing the release of 100,000 Jews from Hungary at the end of the war. I endorse what he said about the importance of the monitoring groups. At Madrid, with our colleagues, we have made a specific proposal to try to ensure the freedom of monitoring groups to monitor the performance of their Government in carrying out the provisions of the Helsinki Act, which was clearly the intention of those who signed it. There is a later question on the subject, but whatever


may result from Madrid, the conference has been useful in that it has allowed us to direct the attention of the world to the abuses to which my hon. Friend referred.

Madrid Review Conference

Mr. Sproat: asked the Lord Privy Seal if he will make a statement on the Madrid review conference.

Mr. Blaker: The Madrid conference is in recess until 4 May. Work on the drafting of the final document is under way and I hope that it will still be possible to reach agreement on a generally satisfactory outcome, including a number of the proposals which we and our partners have put forward.

Mr. Sproat: Can my hon. Friend tell the House whether earlier in the Madrid conference, the British Government drew the attention of the Soviet authorities to the promise that they made under the Helsinki agreement to make British newspapers and magazines widely available in the Soviet Union? Can he tell the House which newspapers are available, and in what numbers? Is he satisfied with what the Soviet authorities have done?

Mr. Blaker: No, I am not satisfied with what the Soviet authorities have done. The latest information that I have is that a small number of Western newspapers are available in the better, more expensive hotels in Moscow, and possibly other cities, to which the Soviet people as a whole would not be expected to have access. We have made a specific proposal at Madrid relating to the freedom of activities of journalists, which is relevant to this subject.

Mr. Hooley: Are the Government taking seriously the proposals for a European disarmament conference, which have been tabled by France, Germany and other countries? What proposals will the Government make to reinforce those suggestions?

Mr. Blaker: We have co-sponsored the proposals put forward by France.

Mr. Whitney: Does my hon. Friend accept that there is widespread recognition of the value of the robust but constructive contributions that the British delegation has made to the Madrid review conference? Is he aware that that policy points the only way forward to genuine international understanding and detente on the basis of the Helsinki accord?

Mr. Blaker: I am grateful to my hon. Friend for what he has said. A robust attitude on these matters is not in any way inconsistent with progress towards arms control, disarmament and better relations between East and West.

Mr. Denzil Davies: Following the reply that the Minister gave to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), is it now the Government's view—I take it that it is from that answer—that they approve of the proposals on disarmament tabled by the French, which relate to the whole of the Continent of Europe, from the Atlantic to the Urals? Was that the view of the Soviet and American Governments to those proposals?

Mr. Blaker: We support the proposals initially put forward by the French and endorsed by the Western countries as a group, including the suggestion that the confidence-building measures should extend over Europe to the Urals, should be verifiable, mandatory and militarily significant.
The French proposals envisage, at a later stage, after a further review conference, a further conference on disarmament. That is part of the French package. Mr. Brezhnev recently said that the Soviet Union was prepared to accept the extension of those confidence-building measures to the whole of Europe. We are now trying to explore the Russian attitude towards the other aspects of the French proposals, which we think are equally important.

Gibraltar

Mr. McQuarrie: asked the Lord Privy Seal if he will make a statement on the situation regarding the implementation of the Lisbon agreement, which was signed in April 1980 by Her Majesty's Government and the Spanish Government, with a view to restoring normal relations between the dependent territory of Gibraltar and Spain.

Sir Ian Gilmour: When my right hon. and noble Friend met the Spanish Foreign Minister in Brussels on 16 March, he was assured of the Spanish Government's continuing commitment to the agreement of 10 April 1980 which provided for the restoration of direct communications between Gibraltar and Spain and the opening of negotiations.

Mr. McQuarrie: I am grateful for that reply, but obviously as far as the Spaniards are concerned it is the old story of "Mañana, mañana". The agreement was signed on 10 April last year. Does my right hon. Friend consider that unless we can have a positive timetable for the implementaion of the agreement we should tell the Spaniards that we consider that the agreement is no longer viable?

Sir Ian Gilmour: I agree that there has been a considerable element of mañana about the agreement, but we are trying to emphasise to the Spanish Government the need to implement the agreement, because their failure to do so has an adverse effect in Gibraltar. I believe that our approach of pressing for the agreement to be brought into effect is better than my hon. Friend's suggestion that we should seek to abrogate it.

Several Hon. Members: rose—

Mr. Speaker: Order. Since Welsh is not allowed in the House, I think that "mañana" must go the way of Welsh.

Mr. Russell Johnston: Can the Lord Privy Seal say whether, apart from the pleasantries that he exchanged with the Spanish ambassador, he asked directly what conceivable reason there can be for democratic Spain sustaining restrictions introduced by the previous dictatorship and not doing anything about them for a whole year?

Sir Ian Gilmour: The meeting was with the Spanish Foreign Minister. I agree that it was a pity, as, no doubt, the Spanish Government would agree, that the restrictions were not abolished when Spain became a democracy. They should be long gone. I hve no wish to defend the continuation of the restrictions. Like everybody else in the Government, I have been pressing for their removal for the past one-and-a-half years and I am still hopeful that that will happen.

Mr. Wall: Much as we should like to see Spain join the EEC and NATO, would either course be possible


unless the blockade of Gibraltar is lifted? Can my right hon. Friend confirm that under the legislation before the House Gibraltarians will continue to enjoy the right of entry into this country?

Sir Ian Gilmore: On the second part of my hon. Friend's question, he knows that a Bill is before the House and that is primarily a matter for my right hon. Friend the Home Secretary. My hon. Friend will be aware that I and others have frequently emphasised that the idea of two members of the EEC having a frontier closed between them is unthinkable.

Middle East (Luxembourg Paper)

Mr. Mikardo: asked the Lord Privy Seal if he will list the countries and parties visited by the President of the European Community during his fact-finding mission to the Middle East and the reactions of each of them to the Luxembourg Paper.

Sir Ian Gilmour: The Netherlands Foreign Minister, Mr. Van der Klaauw, has so far seen the secretary-general of the Arab League and visited Iraq, Syria, Jordan, Tunisia, Morocco and the United States. He is also expected to visit Israel, Egypt, the Palestinians, including the PLO, and other Arab States including Saudi Arabia. He has so far been received everywhere with warmth and positive interest. The details of his consultations remain confidential to the Governments of the 10 members of the European Community.

Mr. Mikardo: Since, apart from the warmth of a courteous reception, not a single front-line participant on either side of the Arab-Israeli dispute has exhibited the least interest in the European initiative in either of the tours that have been made, does the initiative serve any purpose except to prop up the amour propre of two or three Foreign Secretaries in Western Europe?

Sir Ian Gilmour: The hon. Gentleman has got his facts wrong. President Sadat has enthisiastically welcomed the European initiative more than once, and so has King Hussein of Jordan. Therefore, in at least two instances, the hon. Gentleman is entirely mistaken.

Mr. Temple-Morris: In the light of the Europen initiative, may I invite my right hon. Friend to concentrate on the Lebanon, in view of the deplorable goings on in that unfortunate country? How does my right hon. Friend envisage the Europen initiative helping the Lebanon and what is the Government's approach to dealing with the various sectional influences at work in that country, be they PLO, Israeli of Syrian?

Sir Ian Gilmour: As my hon. Friend implies, Lebanon cannot be considered wholly apart from a settlement of the Palestinian question. However, he will appreciate that the European initiative is directed primarily towards a solution of that problem. As my hon. Friend the Minister of State said in answer to an earlier question, there has been a great deal of diplomatic activity and the 10 members of the EEC have made demarches to both the Israeli and the Syrian Governments. However, I cannot enlighten my hon. Friend much beyond that.

Mr. Hooley: Will the discussions include the possibility of studying ways of strengthening the United Nations peacekeeping force in Lebanon, which has

suffered unjustifiable harassment and deserves the full support of Western Europe and of America, which created it?

Sir Ian Gilmour: I entirely agree with the second part of the hon. Gentleman's question. The UNIFIL force deserves full support. It has done fine work and suffered some sad casualties.

Mr. Lennox-Boyd: Does my right hon. Friend agree that part of the diplomatic activity on the European initiative demonstrated that an essential prerequisite in a settlement is that the future Government of the West Bank must at least have the right to determine, in the main, the nationality of those who permanently reside on the West Bank? In the light of more than 60 settlements created by the Israeli Government on the West Bank, does my right hon. Friend agree that that factor must be taken into account in seeking flexibility from both sides?

Sir Ian Gilmour: I agree with my hon. Friend. He knows that one of the subjects of the European paper relates to self-determination and exactly what that means on the West Bank. The question of Israeli settlements is related to that. The acceleration and strengthening of those settlements are obviously obstacles to peace and must raise doubts about the seriousness with which the Israeli Government are pursuing peace.

Grenada

Mr. Farr: asked the Lord Privy Seal if he will seek a Commonwealth initiative on the situation in Grenada.

Mr. Ridley: No, Sir.

Mr. Farr: Is my hon. Friend aware that there is a great fund of expertise and good will in the Commonwealth which should be drawn upon before events in Grenada progress beyond retrieval?

Mr. Ridley: Since the People's Revolutionary Government came to power by an armed coup in March 1979 democratic processes have been suspended. No elections have been held, the press is strictly controlled and there are reported to be about 100 political prisoners in Grenada. It is questionable whether, in those circumstances, it would be right for the Commonwealth to mount an initiative, because the Commonwealth is an association of independent States and there is no precedent, other than the rather doubtful one of Uganda, for it taking an initiative of the sort that my hon. Friend has in mind.

Mr. Ron Brown: Whatever the faults of the present regime in Grenada, is it not important for the British Government to say to the President of the United States that he and his colleagues have no right to interfere in that part of the world? Is it not important for us to encourage the democratic process in Grenada? Clearly that can happen only if we encourage the normal processes to operate. The armed might of the United States will certainly not help. It has not helped elsewhere and—

Mr. Speaker: Order. That is enough to be going on with.

Mr. Ridley: I am not aware that the United States or any other country has interfered in the internal affairs of Grenada. The United States is not giving aid to Grenada and I think that that is what is referred to when the charge


of interference is made. But since Grenada has signed economic agreements with the Soviet Union and other Eastern European countries, it would seem to me more appropriate for aid to come from those sources.

United Kingdom—Republic of Ireland (Joint Studies)

Mr. Biggs-Davison: asked the Lord Privy Seal, further to the reply of the Prime Minister to the hon. Member for Brigg and Scunthorpe (Mr. Brown) Official Report,25 March, column 332, when he expects the joint studies between the United Kingdom and the Republic of Ireland to be completed.

Sir Ian Gilmour: It is not possible at this stage to predict when the joint studies will be completed.

Mr. Biggs-Davison: Will my right hon. Friend acknowledge that lack of information, particularly on the Foreign Office role, has aroused dangerous suspicions in Northern Ireland that enabled the hon. Member for Antrim, North (Rev. Ian Paisley) to march himself up and down into a medacious frenzy and contributed to the electoral absurdity in Fermanagh and South Tyrone? May we have a statement soon?

Sir Ian Gilmour: I agree with the description of certain events but I do not agree with the causality ascribed to them by my hon. Friend, with respect to him. He will be aware that my hon. Friend the Prime Minister said
the studies are being conducted by both sides on a basis of confidentiality. When complete they will be submitted to the Taoiseach and myself and will be considered by the two Governments".—[Official Report, 25 March 1981; Vol. 1, c. 332.]
I am sure that my hon. Friend, on reflection, will consider this an entirely proper course of action.

South Africa (Apartheid)

Mr. William Hamilton: asked the Lord Privy Seal if he will make a statement on the representations made to Her Majesty's Government by the Nigerian Government on the need to take more decisive action against the South African policy of apartheid.

Mr. Luce: We share the Nigerian Government's view of the unacceptability of apartheid and the need to encourage change in South Africa. Our view that this is best achieved by a policy of contact and dialogue is well known to the Nigerian Government.

Mr. Hamilton: Will the Government show some concrete evidence of this dislike of the evils of apartheid by publishing the names of those British companies operating in South Africa which are currently paying starvation wages to their employees? Does the Minister recognise that three of those companies—Lonrho, Trust Houses Forte, and a subsidiary of Burmah Oil—have director involvement of prominent Conservatives, including the chairman of the Conservative Party, the chairman of the 1922 Committee, and the husband of the Prime Minister? Does not the Minister think that those are despicable practices with which to be involved?

Mr. Luce: I resent the way in which the hon. Gentleman has approached the question of the importance of the code of conduct. We believe that this is a modest and useful way in which we can use our influence. Questions of detail about the code of conduct must be addressed to the Department of Trade. It would be helpful

and constructive if people sometimes highlighted the examples of the British companies which are setting a lead in South Africa, instead of highlighting some of the backward companies. That would be a more constructive approach.

Mr. Hamilton: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.

Oral Answers to Questions — EUROPEAN COMMUNITY

Council of Ministers

Mr. Dormand: asked the Lord Privy Seal what the main subjects of debate were at the recent meeting of the European Economic Community Council of Ministers.

Mr. John H. Osborn: asked the Lord Privy Seal what will be the main subjects of discussion at the last meeting of the European Economic Community Council of Ministers.

Mr. Cunliffe: asked the Lord Privy Seal if he will make a statement on the April meeting of the Foreign Affairs Council.

Sir Ian Gilmour: The Foreign Affairs Council planned for 13 and 14 April was cancelled. I gave an account of the meeting that took place on 16 and 17 March in my reply to my hon. Friend the Member for Coventry, South-West (Mr. Butcher) on 18 March.

Mr. Marlow: On a point of order, Mr. Speaker. Question No. 36 refers to what will happen at the last meeting of the European Economic Community Council of Ministers. I do not think that my right hon. Friend's reply had anything to do with the question.

Mr. Speaker: Order. It is nothing new in this place for an hon. Member to be dissatisfied with an answer.

Mr. Dormand: Will not the right hon. Gentleman not agree that the most important subject for debate now is either the complete withdrawal of this country from the EEC or, perhaps more realistically, the creation of a much looser political association? In addition to the many other benefits that would accrue from such an association, would it not rid us of the CAP and of a powerless European Parliament, seeking to make itself more important by the expenditure of many thousands of pounds? Will the right hon. Gentleman note that those of us in favour of withdrawal from the EEC are as much Europeans as those who support our membership of the EEC?

Sir Ian Gilmour: The hon. Gentleman asks this question every month and I try to give him a slightly different answer. In some sense, no douby, those who are against the EEC are good Europeans. It is, however, a slightly odd conception. This is, after all, a major grouping of European States. To be opposed to it is not a very obvious way of showing oneself to be pro-Europe.

Mr. Osborn: There is, at the present time, immense pressure on the steel industry of Europe and upon the special steel industry of Sheffield. Have Ministers discussed the fact that special steels are being imported from the Community and elsewhere into Sheffield? Are they satisfied that the prices are genuine prices at home or


due to dumping? What impact has the price of energy had on the cost of steel coming from elsewhere in the Community? Is it not important to find out the truth?

Sir Ian Gilmour: I think that all hon. Members would agree with my hon. Friend that it is a good thing to find out the facts and the truth. As he will be aware, the recent Energy Council set in hand work to try to find out how much truth is attached to the subsidising of energy prices. On the question of steel, a matter of crucial importance to my hon. Friend, he will be aware that there was a special Steel Council about a fortnight ago. There was further discussion at the informal meeting of Industry Ministers in 7 April. The Commission is now preparing precise proposals to phase out State aids to the industry and to promote restructuring. With respect to my hon. Friend, that is the main problem that the Commission sees at present.

Mr. Healey: Does not the right hon. Gentleman agree that the Community is now running into a head-on crisis on the common agricultural policy, on the budgetary regime and on the terms in which the Community is enlarged towards the South? Is it not obvious that although Britain's relations with Europe are of vital importance both to Europe and to the United Kingdom, the fact that the summit conference spent the whole of its time in bitter and angry argument about a week's fishing by Hamburg fishermen off the coast of Canada, suggests that the Community has become a tragic farce?

Sir Ian Gilmour: I am sorry to see the right hon. Gentleman rather changing his line on Europe. He has normally taken, in the past, a rather more constructive attitude. I am sure that the right hon. Gentleman will agree, on reflection, that it is not true to say that the Heads of Government spent the whole time at Maastricht discussing fish. They did not. They spent a great deal of time discussing other matters as well. Only a relatively small amount of the time was spent discussing fish.
Of course, there are important decisions to be made about the future of the CAP, about restructuring and about enlargement. With respect to the right hon. Gentleman, to say that these are crises is an abuse of language. They are important matters that must be decided. It is, however, an exaggeration and wrong to say that the Community is in a crisis.

Mr. Healey: With great respect, is it not the case that, under the present budgetary regime, if Portugal joins the Community, as Her Majesty's Government have agreed it should, she will be making a net contribution to the community budget although she is the poorest country in Europe whereas Denmark gets a substantial net gain from membership of the Community? Putting this matter right is of immense importance to the United Kingdom. For the right hon. Gentleman to suggest that the problems that the Community will face on these matters over the next two years do not constitute a crisis is an abuse of language.

Sir Ian Gilmour: We can perhaps argue later about the exact meaning of words. I agree with the right hon. Gentleman that these are matters of great importance. He will be aware that we are about to start the process of restructuring the budget. That must, and will, be completed before Portugal joins. Therefore, what I agree would be an absurd abuse if Portugal were to be a net contributor will not happen.

Mr. Nicholas Winterton: Will my right hon. Friend say what steps Her Majesty's Government are taking within the European Economic Community to formulate a common policy towards the constitutional problems of Namibia? Will not he agree that the Common Market countries can play a valuable part outside the United Nations, and also as members of the United Nations, in helping to resolve the problems of Namibia, a country that is vital to European and Western Nations?

Sir Ian Gilmour: I agree entirely with my hon. Friend's general proposition. As he will be aware, the Community, as such, does not have a great deal to do with Namibia. Three members, ourselves, France and Germany, are members of the Five and have been, and are continuing to be, active in this matter.

Future Policy

Mr. Russel Johnston: asked the Lord Privy Seal in what areas of policy the Government will press for greater integration within the European Economic Community over the next two years.

Sir Ian Gilmour: Our main task over the next few months will be to pursue the restructuring of the Community budget and the reform of the common agricultural policy. We shall also be seeking to encourage the development of Community policies in new fields and to improve existing policies, We shall continue our efforts to improve the machinery of foreign policy co-operation.

Mr. Johnston: Does the Minister agree with the basic principle that the only way forward for the Community is by further integration?

Sir Ian Gilmour: Many people would argue about the words, but if the hon. Gentleman means a greater convergence of policy and great unity in Europe, I think everyone would agree.

Mr. Budgen: Will my right hon. Friend explain why the principles for the reform of the CAP were not put forward before the recent farm price review so as to prevent yet another vast increase in expenditure occurring and encouraging even larger surpluses, which will either have to be funded by European taxpayers or dumped on world markets, to the disadvantage of the poor people of the world?

Sir Ian Gilmour: With great respect, my hon. Friend has not got his facts right. The prices agreed at the Agricultural Ministers' Council were lower than the prevailing rate of inflation. They should not add to the admittedly undesirable high rate of surpluses.

Mr. Jay: When the Minister is restructuring the budget, will he bear in mind that the annual administrative costs of the Commission now exceed the total expenditure from the regional fund?

Sir Ian Gilmour: That may well be true. I believe that the number of people employed is about the same as those who are employed by Wandsworth council. Although bureaucracy is not a major problem, it is always a problem, but it is made more difficult by the many languages that are spoken in the Community. That is an insuperable difficulty.

Mr. Dykes: Does not my right hon. Friend agree that anti-EEC detractors on the Labour Benches and elsewhere


want to have the best of both worlds? If the EEC countries co-operate it is said that the gullible United Kingdom is being conned by foreigners, and if that does not happen there is a perpetual crisis. Can they have it both ways?

Sir Ian Gilmour: They probable can. In a sense, they do. However, I entirely agree with my hon. Friend's sharp analysis of the situation.

Mr. Denzil Davies: Instead of talking about integration, would it not be better if the Government spent their time seeking ways of disentangle this country from the stranglehold of those treaties? Would not our relations with the other European countries in commerce, trade, agriculture and fisheries be much healthier if they were not based on those rather unequal and—it seems—immutable treaties?

Sir Ian Gilmour: The right hon. Gentleman should do something about his amnesia, on which I commented last week. He was a prominent member of the Labour Government who made no attempt at all to get out of the treaties which he says are so damaging. If the Labour Party felt that the treaties were so damaging, why did it not do something about them when it was in power? The Labour Party did nothing about it because, when in Government, it is slightly more responsible than when in Opposition.

International Organisations (Consultations)

Sir Anthony Meyer: asked the Lord Privy Seal what proposals he has for improving consultations between European Economic Community representatives in international organisations.

Sir Ian Gilmour: We are generally satisfied with the current arrangements for consultations between European Community representatives in international organisations and have no proposals for changing them at present.

Sir Anthony Meyer: Since the European Community is now by far the largest element in world trade, accounting for about 35 per cent., as against 11 per cent. for the United States and 6½ per cent. for Japan, is it not clear that that organisation wields considerable clout in international negotiations? Would not still closer cooperation between its members and international organisations enable it better to protect the interests of its members?

Sir Ian Gilmour: I entirely agree. It is an immensely important trading organisation—the most important in the world. As my hon. Friend rightly says, it therefore wields immense clout in negotiations. I am anxious and willing that there should be improved co-ordination, but the present system is working well. If my hon. Friend has suggestions to make, we shall be delighted to hear them.

Mr. Denzil Davies: In view of the recent slanging match between the British Prime Minister, the German Chancellor and the French President, when the German Chancellor accused the British Government of cheating and the French President looked back to the halcyon days when there were only six members of the Common Market, and in view of the Lord Privy Seal's language when he reminded President Giscard what a great man President Pompidou was, is it not a farce and an irrelevancy to talk about consultation between the EEC and other international organisations?

Sir Ian Gilmour: It takes time to discover the reasoning behind the right hon. Gentleman's question. The logic entirely escapes me.

Mr. Marlow: Is my right hon. Friend aware that when my hon. Friend the Member for Southend, East (Mr. Taylor) and I visited an international organisation—in other words, the European Assembly—last week, we noted markedly that that organisation had no power? The thing that seemed most important in the debate was the number of women who were employed in higher ranks within the Commission. Given that situation, could we not save a lot of money, and also accord with the recommendations of some eminent commentators in the press, if the powers in that organisation were further decreased and we went back to a nominated and cheaper Assembly than the one we have now?

Sir Ian Gilmour: If that organisation has no power it is difficult to understand how its power can be decreased. That is what my hon. Friend is suggesting. It is not fair to pick out one subject that was being discussed in the European Parliament. My hon. Friend must be aware that even this House often discusses matters which do not appear to be of interest to many people, but they are, nevertheless, important matters.

Mr. Ioan Evans: Is not the trouble with the EEC that it is developing a form of inward-looking Western European nationalism? Would it not be better for European countries, through the United Nations Organisation, to implement proposals such as those suggested by the Brandt commission to deal with the arms race and to help overcome world poverty?

Sir Ian Gilmour: The hon. Member should talk to his right hon. Friend the Member for Llanelli (Mr. Davies), who said that there are so many differences between Western European leaders that they cannot operate at all. I not agree with him. Equally I do not agree with the hon. Member for Aberdare (Mr. Evans), who thinks that European nationalism is a danger to the world. I do not believe that it is a danger.

Mr. Teddy Taylor: Is it not significant that the one international organisation of which we are not a member is the International Sugar Agreement? Is not my right hon. Friend ashamed of what we and other EEC members have been doing this week and last week in damaging the poorest countries by dumping subsidised sugar on to the world market at knock-down prices?

Sir Ian Gilmour: Perhaps my hon. Friend did not hear what I said last week. We are anxious to join the International Sugar Agreement, and we have supported it. I am sure that my hon. Friend is aware that the EEC, through the Lomé convention, takes a substantial amount of sugar from ACP countries. My hon. Friend should bear that in mind.

Council of Ministers

Mr. Dykes: asked the Lord Privy Seal what issues relating to closer co-operation between members of the European Economic Community Council of Ministers on social, economic and political questions of importance he plans to raise.

Sir Ian Gilmour: In addition to the major tasks of restructuring the Community budget and the reform of the


common agricultural policy, we shall continue to seek the development of policies in fields such as transport infrastructure, energy and measures to strengthen the Common Market for goods and services, particularly insurance. We shall be participating in the review of the regional and social funds with a view to strengthening them.

Mr. Dykes: I thank my right hon. Friend for that answer. However, in view of the serious economic problems and unemployment in Europe, is he concerned—like others—that disagreement on individual policies, such as recently occurred on fisheries, will prevent member States from pursuing the Community's wider goals? Will my right hon. Friend try to solve those problems?

Sir Ian Gilmour: I agree with my hon. Friend. Of course, I wish that there had not been such disagreement, but as I said last week, that must not deflect us from seeking to strengthen the Community. Chancellor Schmidt said at the Koenigswinter conference the other day that
if we do run into conflicts in our daily routine we must solve them in the interests of the Community, which also means in the interest of every member country and also in the interest of the global balance of power in whose maintenance the EEC has in the meantime become an indispensable factor".
I think that was well put.

Mr. Healey: In view of the right hon. Gentleman's passion for closer integration in the European Community, can he explain why the Chancellor of the Exchequer, at a meeting of world Finance Ministers last weekend, was the only European Finance Minister to support the American insistence on maintaining high interest rates, against all the other members of the European Community, which wanted lower ones?

Sir Ian Gilmour: I am sorry to complain again about the right, hon. Gentleman's language, but I think that "passion" is rather a strong word to use—as far as I am concerned. He knows that my right hon. and learned Friend the Chancellor of the Exchequer reduced interest rates by 2 per cent. in the Budget, and looks forward to further reductions during the coming year.

Mr. Healey: I apologise to the right hon. Gentleman. I should not have described his pallid langour as passion. Perhaps the word that I should have used was velleity.

Oral Answers to Questions — Questions to Ministers

Mr. Farr: On a point of order, Mr. Speaker. I should like to call your attention to the amount of time that is allotted to EEC questions. Today there were only seven questions relating to the EEC, for which 20 minutes were allotted, and there were about 31 questions relating to the rest of the world, for all foreign and Commonwealth affairs, for which 35 minutes were allotted. This means, once again today, that all the European Community questions have been reached but only about a third of the very important questions relating to Commonwealth and other foreign matters have been reached.
Will you look at this matter, Mr. Speaker, to see whether EEC Question Time could not be reduced to about 10 minutes, perhaps, instead of taking the disproportionately large amount of time that they are now taking?

Mr. Speaker: This is a matter for the usual channels, and not for me. I know that there is considerable difficulty. Those interested in the EEC would like to have longer. [HON. MEMBERS: "Hear, hear."] Order. I nearly said something—but we are on the edge of Easter.

Telecommunications (Monopoly)

The Secretary of State for Industry (Sir Keith Joseph): With permission, Mr. Speaker, I wish to make a statement about liberalisation of telecommunications in the United Kingdom.
On 21 July last year I outlined to the House new competitive arrangements covering apparatus attached to the telecommunications network. Independent standard making and certification bodies are now at work on rules which will replace British Telecommunications' monopoly over approvals of apparatus. Both BT and the private sector are making arrangements to supply apparatus in competition.
Today I am publishing an economic survey by Professor Beesley, which reaches radical conclusions about network services. Copies have been placed in the Libraries of both Houses. Professor Beesley recommends full freedom for private sector suppliers to use the national network to provide telecommunications services to third parties. He envisages BT setting an open and uniform price for all users of its network irrespective of whether the users resell any of the capacity they lease. Professor Beesley recommends that private companies should be able to lease circuits—parts of the network—from BT and sell to the public telecommunications services carried on those circuits.
Professor Beesley points out that data and voice communication technologies are rapidly converging, making the existing BT monopoly arbitrary and constricting. He argues that if private firms were free to use the network, it would bring about innovation and substantial consumer benefits. BT would lose some revenue to its competitors, but much of this should be offset by increases in traffic as the private sector provided more services using the BT network. BT would be free to compete subject to safeguards of fair competition.
If Professor Beesley's recommendations were adopted, I would expect BT to be spurred to provide an even better service. New profitable enterprises and new jobs would be generated as both BT and new entrants stretched themselves to capture new, and in many cases as yet unknown, markets.
Professor Beesley's report marks a clean break from previous approaches. Implementation of his recommendations would transform the United Kingdom market for telecommunications.
The Government are attracted by the free market, please-the-customer arrangements recommended by Professor Beesley. The implications are, however, far-reaching, and I am inviting views over the next two months before coming to detailed decisions in July. I hope that BT will participate in working out the implications and details of what is recommended.
Although outside his terms of reference, Professor Beesley has also considered the implications of possible liberalisation of use of BT's international circuits and of possible competition for the main BT network within the United Kingdom. The free use of international circuits raises complexities, and I am inviting BT to comment. I indicated in my statement of 21 July that I intended to explore the scope for allowing the provision of additional transmission services. A number of organisations have been investigating the market possibilities, and I shall make a further statement on this subject as soon as possible.
In discussing the implications of network liberalisation, Professor Beesley stresses the need for removal of constraints on BT's capital investment. The Government recognise the importance of a modern telecommunications infrastructure to the development of the whole economy and, within the inevitable constraints imposed by the need to control public expenditure and the public sector borrowing requirement, I am discussing with BT the possibility of increasing the amount of external finance available to safeguard BT's vital investment programme.
The opportunities for both BT and others over the whole field of telecommunications equipment and services are immense. The quicker BT and its competitors respond by expanding their range of products, systems and services, the better.

Mr. Stanley Orme: The statement and the Beesley report are other examples of the damage that will be done to essential public services. The report was submitted to the Secretary of State in January. It has just been published, in April, three months later, after the British Telecommunications Bill has left the House of Commons. Why was the report not published during the passage of that Bill through this House? Is not this denying proper parliamentary scrutiny? When shall we have the opportunity to scrutinise the report alongside the Bill?
What effect will the report have on rental charges to the domestic consumer? Will not these be forced up considerably by the Beesley recommendations?
The Secretary of State has implied that the cash limits may be lifted. They are now at £180 million. By how much will he allow the borrowing limit to be increased so that the telecommunications industry can seek more help?
Finally, all in all, does the right hon. Gentleman agree that this will lead to a loss of revenue to BT, a loss, therefore, in efficiency, and therefore, higher charges to all telecommunications users?

Sir Keith Joseph: Once again, the right hon. Gentleman has made very scant reference to the consumers of telephone and telecommunications services. He referred to charges, and I shall answer both of his questions on that subject in a moment.
The delay in publishing the report was necessary for the Government to study it and to come to the provisional reaction which I have explained to the House today. It is not as though my colleagues and I concealed our purposes. Throughout the passage of the Bill through the House we have constantly explained that our purpose was, has been and is to introduce competition for the benefit of the customers in this country and for the benefit of those who work in the industry and who will work in it in future. Hon. Members can see the report, which is available in both Libraries.
The right hon. Gentleman asked two questions about the effect of these measures on charges to the customer. There will be a small loss of revenue to the extent that some traffic will be taken away by effective competition that pleases the customer more. The result of that extra competition will be to increase services in the network.

Mr. Bob Cryer: How does the right hon. Gentleman know?

Sir Keith Joseph: That is the finding of the Beesley report and the finding in America, where the network has been opened up to competition. The result of the two


conflicting influences—namely, the removal of some services because the competition provides them more attractively, and the increased use of the network because the competitors will provide services that are not being provided now—might involve at the greatest a loss of 2 per cent. in revenue in four years' time for BT. That is the view of Professor Beesley. The effect of that at the most might be an increase in rental charges for domestic consumers of about 10 per cent. in four years' time over what they would otherwise be. That at the most will be the result of what is proposed.

Mr. Ian Lloyd: I extend a warm welcome to my right hon. Friend's decision to publish the report. Is he aware that, far from damaging BT, as suggested by the right hon. Member for Salford, West (Mr. Orme), virtually every speaker who has addressed the all-party committee on information technology during the past 18 months has endorsed Professor Beesley's recommendations and conclusions?

Sir Keith Joseph: I am grateful to my hon. Friend. I think that these proposals will produce a much better service and many more jobs.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call the hon. Members who have been rising in their places to question the Secretary of State. I remind the House that there are two more statements to come.

Mr. Richard Wainwright: Is the right hon. Gentleman aware that every responsible reduction of a monopoly is welcome to Liberals but that he is not justified in describing his proposals as liberalisation so long as he insists on tying the hands of BT in respect of its investment? Does he accept that his remarks that BT's further investment has to be constrained by the public sector borrowing requirement is disappointing? Will he confirm that Professor Beesley makes it clear in his report that, in his view, it would be illogical to maintain that constraint on BT's investment budget?

Sir Keith Joseph: I apologise to the right hon. Member for Salford, West (Mr. Orme) because he asked me the same question as that posed by the hon. Member for Colne Valley (Mr. Wainwright) and I forgot to reply. I shall reply to the right hon. Gentleman and the Liberal spokesman.
The amount that BT can invest does not depend on what the taxpayer provides through the Government. The vast bulk of investment comes from depreciation provisions and the rest from retained profits. To the extent that BT's management and work force work effectively and economically, there will be more money through retained profit for investment. The co-operation of the work force in making its services as economic as possible and in moderating its pay claims will have much to do with the sum available for investment.
The Government have encouraged BT to seek through Companies Act companies minority or non-controlling holdings in private ventures that will be outside the PSBR and Government financial control. The Government are seeking to find ways by which investment on a risk basis may be allowed to BT which is outside the PSBR. That involves technical considerations in enabling genuine risk investment to be undertaken by a nationalised industry where prices are monopoly prices and where the Government are taken as giving an implicit guarantee.

Mr. Anthony Nelson: Is my right hon. Friend aware that although many of us welcome the principle of liberalisation, those of us who represent rural constituencies will be very concerned if the hasty process of liberalisation results in a steep increase in charges? What reassurance can he give that the current heavy subsidies that are provided for services in rural areas will not be replaced by substantial increases in costs? Will there still be the facility to refer such increases to one body or another to ensure protection of the consumer?

Sir Keith Joseph: I am pleased that my hon. Friend asked that question. I assure him that his fears are without justification. We are not discussing the postal services on the basis of the cost of distribution being greater in the less densely-occupied areas than they are in the densely populated areas. We are not dealing with a cost disadvatage in rural areas. Once telephone lines are installed, there is no cost burden that is extra in rural areas when compared with the burden in our densely populated city areas. Maintenance is probably more expensive in the densely occupied city areas than in the country. The tendency to equalise the trunk and local call costs on which BT has already embarked will make rural populations more accessible and at less cost when trunk costs are compared with local costs. There is no fear of a burden being imposed on rural populations through the changes that are envisaged.

Mr. John Golding: Is the right hon. Gentleman aware that BT believes that the full proposals would cost several hundred million pounds additional to the £110 million that has been calculated by Professor Beesley and his colleagues? Such an increase would mean massive increases in prices and a reduction in investment. Does he understand that the report will be most fiercely opposed by the Post Office Engineering Union, which is concerned for the consumer, for the telephone service and for its members? The view that there will be no harm done to the rural areas will be regarded as lunacy by all those who have contact with the business.

Sir Keith Joseph: It is in order to give opportunities to BT, the Post Office Engineering Union and any other bodies to give their views that the Government have invited comments before any decisions are made. I am advised that the views that the hon. Gentleman expresses are incorrect except for his representation that the Post Office Engineering Union is against my proposals. I hope that the POEU will recognise that better service to the public and a better use of the network are in the interests of its members as well as in the interests of the public.

Mr. Peter Bottomley: I hope that my right hon. Friend will accept my welcome of the general thrust of the early part of his statement. As for the financing side of BT, when will my right hon. Friend overcome whatever technical problems remain, and when will BT be able to enter into commercial borrowing and make it possible to top up the investment so that the customers are not required to pay more and more for what should be financed by capital borrowing and then returned?

Sir Keith Joseph: I sympathise very much with my hon. Friend's approach. I hope that I shall be able to solve at least part of the problem very soon. I hope that my hon. Friend will not join those who believe that the task of


solving the problem is for the Government. When the Bill is enacted, it will be open to BT to open up, in partnership with the private sector Companies Act companies whose borrowing, provided that BT is not in control of the companies, will be outside the PSBR. We are still seeking with BT risk-taking mechanisms that will also be outside the PSBR.

Mr. Gregor MacKenzie: Is the right hon. Gentleman aware that, notwithstanding what he said to my right hon. Friend the Member for Salford, West (Mr. Orme), most of us regard it as a matter of considerable regret that he did not choose to publish the Beesley report during the course of our deliberations on the British Telecommunications Bill? He said that he would be seeking the views of many people. Will he seek the view of the House of Commons before the Bill becomes an Act of Parliament?
Secondly, I ask the right hon. Gentleman to comment on the statement reported in this morning's press that the board of BT saw the report before it was presented to the House and that it is envisaged that this hasty liberalisation will sharply increase charges in the rural areas.

Sir Keith Joseph: My hon. Friends who served on the Committee and I have never concealed our purposes, which were to reduce monopoly, to increase competition and to consider value added network services as well as the possibility of additional networks. All that I am explaining today is within those general purposes. We shall study the views of all those who use the two months' consultation period. We shall take seriously BT's opinion of the report when it has had time to study the report.

Mr. Barry Henderson: Is my right hon. Friend aware that one of the principal problems of British Telecommunications is finding the capital to develop the resources of the network? Would it not be good if British Telecommunications could sell for cash particular equipment and, when leasing lines, offer them on a 99-year lease to achieve a rapid inflow of cash?

Sir Keith Joseph: Both those points raise interesting possibilities.

Mr. Ioan Evans: Should not the Secretary of State be concerned with the national interest when he makes such statements? As British industry is in serious difficulty and is in a state of collapse, is this the time to break up a public enterprise from which profits come back to the community? Does he not realise that breaking that monopoly at this time will increase competition and allow in foreign capital so that the profits will be hived off abroad?

Sir Keith Joseph: The reduction of monopoly and the increase of competition are nearly always in the national interest.

Mr. Bowen Wells: I congratulate my right hon. Friend on grasping the radical proposals to expand the telecommunications industry. Will he comment on the necessity of impressing upon the Treasury that it should not restrict that expansion unnecessarily by constricting the borrowing of the telecommunications corporation by the PSBR restrictions?

Will he speculate on the increased employment which will be created for Post Office engineers if the proposals are implemented?

Sir Keith Joseph: Investment in BT fell under the recent Labour Government. It has risen in real terms under this Government. We should like to enable it to rise more. However, people are complaining about a much increased real terms investment programme. We hope to enable it to increase further.

Mr. John McWilliam: Will the right hon. Gentleman reflect on the fact that it costs more to drive 10 miles to fix a telephone than to walk 10 yards? That is the purport of one of his statements. Will he further reflect on the fact that his right hon. and hon. Friends who represent rural constituencies will in four years' time carefully consider his assurances about rural services if he gets his way? Will he reflect on the fact that Post Office engineers will not accept that they should forgo increases in wages and salaries merely to enable such a cream-skimming operation to take place for large companies in the centre of cities?

Sir Keith Joseph: We are giving a period of consultation. I do not agree with any of the hon. Gentelman's points. However, I do not propose to take up the time of the House to deal with them now. Let him put his views, and we shall study them.

Mr. Bob Cryer: Does the Secretary of State accept that, through hiving off the facilities, the industry will be faced with a massive influx of imports? Is not it absurd for him to embark on that course when only last week he was bailing out ICL—which was more or less in the same position—to the tune of £200 million? What control will he place on the import of equipment which will affect British Telecommunications?

Sir Keith Joseph: The hon. Gentleman should read the reports of the Committee proceedings. My hon. Friends the Minister of State and the Under-Secretary explained the position clearly. All the reasonable time in which British industry can prepare for the new conditions will be allowed.

Mr. Michael English: Will the right hon. Gentleman go back to his office and ask why we cannot have the same definition of PSBR as that which operates in the OECD countries?
I have great sympathy with what he is trying to do. I cannot see why investment in British Telecommunications which is vital to the country, whether it be in private or public hands, should be restricted by the present arbitrary definition.

Sir Keith Joseph: Perhaps the hon. Gentleman is right. One should also consider the difference which nationalisation makes in other countries as well.

Mr. English: France.

Mr. D. N. Campbell-Savours: If during the consultation it turns out that the suggestions of Opposition Members are right and that rural charges will rise, will the right hon. Gentleman change the legislation or any recommendations which he makes to the House?

Sir Keith Joseph: There is much flexibility in the charge which Professor Beesley envisages that BT would make for the use of network services to enable any such result to be taken into account.

Mr. Dennis Skinner: Is the Minister aware that the Liberal spokesman, the hon. Member for Colne Valley (Mr. Wainwright), ought to be the last person to talk about monopoly when that party is involved in a reverse takeover by the snob party? Has British Telecommunications gone yellow ready for the Japanese takeover?

Mr. Orme: Will the Secretary of State and the Leader of the House take into account this afternoon's exchanges and the fact that we should like a debate at the earliest opportunity? Issues such as rural charges and general charges should be discussed by the House, thus giving the Secretary of State the chance to explain his statement about rural charges.

Sir Keith Joseph: I am sure that the right hon. Gentleman will put his views to those who deal with them through the usual channels.

Civil Service Dispute

The Minister of State, Civil Service Department (Mr. Barney Hayhoe): With permission, Mr. Speaker, I should like to make a further statement about the Civil Service dispute.
In my statement on 5 March, I explained that nonindustrial civil servants had been offered an increase of 7 per cent. from 1 April and that the Government had at the same time stated their desire and intention to establish for the future a new, ordered and, it was hoped, agreed system for determining Civil Service pay.
That offer and the statement of intention were not accepted by the unions. Instead they embarked on a programme of industrial action, including strikes, which has continued without interruption since 9 March. The industrial action as a whole has been designed to cause the maximum amount of damage at minimum cost to the unions. The number actually on strike has rarely exceeded 3,700. But the guerrilla tactics have included walk-outs for part of the day, protest meetings in working hours, and non-co-operation with management.
I can assure the House that those on strike do not receive any pay or allowances and that the period of absence does not count for pension purposes. Staff attending their offices but refusing to work normally are being relieved of their duties without pay. The unions' stated objective has been to damage the work of the Government, but that damages the community as a whole. Any extra cost to the Government can only be met by the taxpayer.
Further, despite assurances to the contrary, the unions have increasingly sought to disrupt services to the public. Local offices providing benefits and services to the public have more than once been closed for part or whole of the day without prior warning, meaning fruitless and time-wasting journeys by many members of the public. There have already been delays and frustrations for passengers at ports and airports, and the threat to hit the Easter traffic is to be deplored.
Despite that calculated programme of disruption by a minority of civil servants, which has hit the public and done great damage to the reputation of the Civil Service itself, I am glad to tell the House that the work of all Government Departments has continued. The bulk of Government revenue is being banked, and delays

generally have been kept to a minimum. Measures have been taken to overcome the threat to the country's defence capability.
There is another side to the coin. Many civil servants have shown themselves to be loyal to their service and have worked hard and conscientiously to keep the work of their departments going, in some cases in the face of threats and intimidation. I am sure that the House will join me in thanking and paying tribute to them.
There have been suggestions that the Government should be taking steps to bring the unions back to the negotiating table. I must make the position clear. Our offer of 7 per cent. for the 1981 settlement is the most that can be afforded from cash limits this year—which means the most that we think it right to ask the taxpayer to finance. Indeed, 1½ million to some 2 million people in the public service have already settled within these cash limits. The Civil Service has had pay increases, on average, of almost 50 per cent. in the past two years. That fully rectified the adverse effects of the previous Administration's incomes policies. Against that background, and at a time when pay settlements generally have fallen sharply and are now well within single figures, we see our offer this year as being both fair and reasonable.
My right hon. and noble Friend and I know that many civil servants recognise that fact but are, none the less, concerned that future arrangements for settling their pay should not be confined by cash limits predetermined by the Government without negotiation. We understand that concern, and we told the unions before the industrial action began that they could come and talk to us about future arrangements at any time. This still stands; we are ready and willing to talk whenever they are. I hope that the House will agree that that will be a much better and more fruitful idea than pursuing disruptive industrial action.

Mr. Charles R. Morris: Does the Minister recall that when he made his statement on 5 March I warned him about the grave situation that was likely to develop as a result of the civil servants' industrial action, but, in spite of that, and during five weeks of escalating industrial difficulties and increasing public frustration, there has been no meeting with the Civil Service trade union leaders since 3 March?
Is the hon. Gentleman aware that the Government give the impression that they are sitting back and doing nothing in the hope that the problem will go away? Why have there been no meaningful negotiations in the past five weeks, bearing in mind that civil servants are denied access to arbitration and that the Government refuse to make time available in the House to debate the issue? Why are they gagging an examination of possible solutions to the problem?
The Minister referred to a new, ordered and agreed civil service pay system, but why after five weeks of industrial action do we know as little about the Government's thinking on it as we did when the Minister made his statement on 5 March? How will the new system differ from the present system of pay comparability for determining Civil Service pay?
Will the Minister encourage the Prime Minister to desist from her repeated attacks on civil servants? She has referred to index-linking of pensions and the establishment of the Scott committee, but does the hon. Gentleman accept that that committee's recommendations vindicate


everyone except the Prime Minister? Is he aware that the Prime Minister's signal achievement in her ralationship with the Civil Service has been to transform 500,000, in the main, loyal and dedicated public servants into ½ million industrial militants?

Mr. Hayhoe: I recall the right hon. Gentleman's comments about the gravity of the situation. I repeat that it results from the decisions of the unions which are taking the action and causing the disruption and hardship. As my right hon. and noble Friend has made clear, our doors are open. We are ready and willing to talk to people who want to talk to us.
When I met the unions on 3 March, there was general agreement that it would take considerable time to work out and establish the details of the new system. The trade union leaders there had no illusions about that. Full and detailed discussions will be necessary. As I said on 5 March, we could not be sure that the new system would be in operation for the 1982 settlement. Work is actively going ahead. I hope that even now the unions will recognise that we can continue the talks. If they doubt our good faith about establishing a new system, we are happy to talk the matter over.
I repudiate utterly the right hon. Gentleman's snide attack on my right hon. Friend the Prime Minister. Let it be clearly on the record that we wish to ensure that civil servants are considerably better paid than they were with the pay increases under the previous Administration.

Several Hon. Members: rose—

Mr. Speaker: A large number of Northern Members hope to speak in the main debate, and it will be almost impossible to fit them all in as we have to follow a further statement and an opposed Ten-Minute Bill. I therefore propose to allow a quarter of an hour for further questions on this statement.

Mr. Paul Dean: Is my hon. Friend aware that the increasingly militant attitude advocated by some trade union leaders is widely seen inside and outside the Civil Service as wholly contrary to its best traditions and damaging to its good name? Against that background, is he aware that many civil servants would be prepared to accept the 7 per cent. offer as long as they had assurances about future procedures about pay, conditions and pensions? Can my hon. Friend assure us that he is pressing ahead as fast as he can with the details of the new arrangements?

Mr. Hayhoe: I agree with my hon. Friend that the militant attitude and comments of a small minority involved in the industrial action are intensely damaging to the high standards of the Civil Service. I pay tribute to the great service that we get from our civil servants in normal times. Although they are disappointed at the level, a large number accept that 7 per cent. in present circumstances is fair and reasonable. Of course, as I have indicated, our doors are open and we are prepared to have further talks with the unions on assurances about the establishment of an agreed system for the future determination of pay and indeed about arrangements for the 1982 settlement, which I know concerns them.

Several Hon. Members: rose —

Mr. Speaker: Order. As I have imposed a time limit for questions on this statement, I hope that we shall have brief questions and brief answers.

Mr. A. J. Beith: Will the Minister admit that he is operating an incomes policy exclusive to the public service and it is therefore not surprising that there is a great deal of resentment within the Civil Service? Does he agree that there is no justification and almost no precedent for direct action to imperil the defence of the country? Is he aware that even those of us who disagree with the Polaris strategy believe that it is for the elected Government to decide when naval vessels should put to sea and not for the Civil Service unions?

Mr. Hayhoe: I reject the suggestion that this is an incomes policy. We are doing what we said, namely operating a cash limit policy for the public service. I note and am grateful for the hon. Gentleman's comments about the defence of the country.

Mrs. Peggy Fenner: I welcome my hon. Friend's realisation of the part of the bargain which concerns civil servants most, namely, the future of pay negotiations. He used the words "threats and intimidation", so clearly he knows that they are occurring. What is he prepared to do to defend loyal civil servants who wish to go to work?

Mr. Hayhoe: So far as the Government are concerned, arrangements are always made so that those civil servants who wish to work are able to do so. I think that picketing, generally speaking, has been in accordance with the code of practice and certainly in accordance with the new legislation passed in the last Session. If there are departures from those practices and if there is unlawful picketing, the Government will of course not hesitate to take the necessary action.

Mr. K. J. Woolmer: Does the Minister recognise that his statement, in tone and content, will be regarded as negative and provocative by many workers and a serious misjudgment, certainly in relation to the Inland Revenue service, of the mood of the vast majority of workers? If the Government are convinced of the pay justice that they have dealt out, why did they unilaterally tear up the agreement? Why did they not agree to arbitration? Why will they not publish the pay research findings? Do the Government really wish to negotiate? If they do, why do they not put a document on the table so that serious negotiations may take place?

Mr. Hayhoe: It is perhaps illustrative of the absurdities of some of those who criticise the Government's action that the hon. Member should criticise me for being negative and provocative in saying that my right hon. and noble Friend's door is open to talk at at any time with union leaders about the future arrangements for Civil Service pay.

Mr. William van Straubenzee: I understand my hon. Friend's proper concern to keep this matter in perspective, but does he understand the intense irritation caused to the constituents of hon. Members on both sides of the House by the action being taken, particularly that planned over the Easter weekend? Will he seek other, additional ways to make known to members of the Civil Service those very constructive parts of his


statement relating to the future negotiating machinery, perhaps through the internal methods available to him within the service?

Mr. Hayhoe: I hope that the fact that the statement has been made in the House means that it will be widely understood that the Government are sincere about wishing to establish an ordered system for the determination of Civil Service pay. We believe that that is desirable. Our doors are open to discuss with the unions if they require greater assurances of our good faith in these matters. I agree with my hon. Friend that there is intense irritation and annoyance that the Easter holiday traffic may be seriously interrupted and disturbed as a result of Civil Service industrial action.

Mr. Ian Wrigglesworth: Is the Minister aware that neither I nor my colleagues will condone industrial action which in any way threatens our national security or damages the poorest members of society who depend upon social security or other benefits for their living. However, does he not agree that these disputes will proliferate so long as there is no settled system of pay determination for all workers? Will he start down that road by putting his proposals on the table for discussion instead of talking about a new system without outlining it?

Mr. Hayhoe: I welcome the hon. Gentleman's comments about not condoning industrial action that would in any way interfere with essential defence services. It is worth remembering that the last time that Service men were used in regard to Polaris submarines was in July 1978, under the Labour Administration. They are being used to maintain the essential defence services. It is a travesty to suggest that they are being used as strikebreakers.

Mr. Vivian Bendall: As my hon. Friend has pointed out that single-figure wage increases are taking place in the private sector, will he point out that a job in the Civil Service has fairly good security as well as an index-linked pension, which no private company could afford to provide?

Mr. Hayhoe: I think that most civil servants, if they look at the situation dispassionately, recognise that their job security is very much better than that of many of their colleagues and opposite numbers in the private sector. Of course, there is a running down of the number of jobs in the Civil Service. We hope to slim the service down to 630,000 by April 1984. That is being done not by compulsory redundancy but very largely as a result of natural wastage. The level of compulsory redundancy among civil servants is very much lower than that which, regrettably, has occurred in many other sectors of the economy.

Mr. Jack Straw: Does the Minister realise that, so long as he refuses to publish even a paragraph in writing about what his proposed future arrangements for pay negotiations will actually mean, the suspicion of the Government's intentions and the bitterness in the Civil Service will continue to grow? As a first step to getting negotiations started, will the Government publish a statement for negotiation on what they mean by future agreed arrangements for Civil Service pay?

Mr. Hayhoe: I thought that we had made clear that matters which I know concern the unions—such as independent fact-finding, comparison with pay levels

outside, arbitration arrangements and matters of that kind—are not excluded from the discussions. Equally, matters concerning the supply and demand of staff, the relative security of employment to which I have referred, the relative attractions of terms and conditions as a whole—pay, pensions, leave and the like—as well as the cost and general economic circumstances of the country must be taken into account in establishing the new system. As I said earlier, it will take a very considerable time for this to be done. I do not know whether it will even. be possible for such a new system to be in place by 1982. As I have made clear, however, we are prepared to talk to the unions if they wish to talk to us about both the distant future and the 1982 settlement if that is what they wish.

Mr. John Bruce-Gardyne: Is it true that Inland Revenue employees who are not doing their jobs cannot be sent home until they have been notified in writing that they will be sent home and that the union organisers are preventing such letters arriving? If so, is it not high time that such an arrangement was terminated forthwith? Will my hon. Friend also assure the House that on this occasion we shall not repeat the error that we have sometimes made of achieving a settlement of one dispute at the cost of setting up a highly inflationary long-term wage settlement process?

Mr. Hayhoe: Our intention in making the new arrangements is that they should form part of the Government's general policy which is designed to bring down inflation.
With regard to sending people home and relieving them of their duty when they are not carrying out the normal duties of the grade, we follow the TRD procedures, as they are called—and it is right and proper that we should do so—acting always within the law, as I am sure that my hon. Friend would wish.

Mr. Donald Anderson: Is it not yet clear to the Government that if this dispute is to be brought to an end there will almost certainly have to be some form of outside intervention? That being so, should it not be sooner rather than later instead of allowing increasing bitterness to build up in the unions and growing frustration among the public?

Mr. Hayhoe: I do not accept that ouside intervention is inevitable to resolve this dispute. I believe that if the unions concerned would call of their action and get round the table—come through the open door, as I have described it, of my right hon. and noble Friend the Lord President of the Council—and discuss these matters, we could come to conclusions of which the vast majority of civil servants would approve. I hope that therefore they would be supported also by the trade union leaders involved.

Mr. Teddy Taylor: Has the work that the Government have done over the last five weeks been such that they will be able to be more specific on the items to be included in pay research than they were ac the meeting on 3 March? Can my hon. Friend explain how the computers that pay money to the Government and to contractors do not work, while the computers that pay Civil Service salaries appear to work?

Mr. Hayhoe: Perhaps my hon. Friend was not listening at the relevant moment, but I specified a number of factors which the Government and, I believe, the trade unions


would wish to have considered in the review of future arrangements. A large number of computers are involved. On one or two occasions, when the suggestion was made that a particular computer ought to be allowed to run to make a selected number of payments which suited the unions but which were discriminatory against others— for example, forms in the private sector—the management concerned utterly refused to agree and insisted that no such discriminatory payments should be permitted from any computer complex.

Mr. John Grant: As relations between the Government and the Civil Service are now at an all-time low, and as the whole House is clearly very concerned about the plight of Easter holiday makers, will the Minister, instead of telling us that the door is open to the unions, go from the House this afternoon, pick up the telephone and invite the trade unions in for meaningful discussions to try to resolve the dispute?

Mr. Hayhoe: The hon. Gentleman cannot understand the real world. The union leaders know that the door is open. If they want to come and talk, we shall be there to talk to them; but I do not see much point in inviting people to talks unless I know that they wish to talk. The position about talks is fully understood by the union leaders. I hope that hon. Members on both sides of the House will join me and my right hon. and hon. Friends in asking the unions to call off the action, which is designed to cause hardship to Easter holiday makers. I hope that that clear message will go from this House.

Mr. Nigel Forman: Is it not a fact that most members of the public and, indeed, many civil servants think that a settlement of 7 per cent. or so would be fair? But is it not also important in the future, in determining Civil Service pay, that the reference should be not just to the previous year, which in many cases might be an inflationary reference, but to a bracket of years, which would allow a fairer comparison with the private sector?

Mr. Hayhoe: I believe that factors like that should be taken into account, and I hope that the new pay system, when it is established, will be a much quicker response system than the old pay research and pay agreement, which attracted, it should be remembered, a great deal of criticism within the Civil Service, from Civil Service unions, and from outside. It had lost public confidence, and it was necessary that it be replaced. It is with that that the Government are involved.

Council Houses (Sale)

The Minister for Housing and Construction (Mr. John Stanley): With permission, Mr. Speaker, I wish to make a statement concerning intervention under the rightto-buy provisions of the Housing Act 1980.
On 21 February last year, during the Standing Committee proceedings on the Housing Bill, I gave an assurance that the Government would take the necessary administrative steps to indicate to a local authority when we were contemplating serving a notice of intervention under what is now section 23 of the Act. That section gives

the Secretary of State power to intervene where it appears to him that tenants have or may have difficulty in exercising the right to buy effectively and expeditiously.
The right-to-buy provisions of the Housing Act commenced on 3 October last year. They have therefore now been in force for more than six months. That is an appreciable period, in which progress in implementing the right to buy can be demonstrated or not.
It is quite evident that in certain authorities there has has been very little progress. On 4 March and 1 April I named in the House 27 authorities with which we had taken up formally their progress in implementing the right to buy. We have since obtained further information from them all.
We are not satisfied with many of the replies we have received and further evidence of progress is being sought from these and other authorities. However, in the case of seven authorities it appears already that the rate of progress is so unsatisfactory that intervention under section 23 would be justified.
In accordance with the assurance that I gave during the passage of the Bill, letters are therefore being sent today to the seven authorities concerned stating that the Secretary of State is contemplating serving a notice of intervention on them. The letters ask the authorities to provide, by Wednesday 13 May, further information on their current and estimated future progress in implementing the right to buy. If at that point it appears that the tenants of any of these authorities have or may have difficulty in exercising the right to buy effectively and expeditiously a notice of intervention will be served under section 23 of the Act.
The authorities concerned are as follows: Barking and Dagenham, Camden, Greenwich, Newham, Sheffield, Stoke-on-Trent and Wolverhampton.
The rights of council tenants to buy their homes are legal rights granted by Parliament. The Government will take what steps are necessary to see that those legal rights are upheld.

Mr. Gerald Kaufman: Is the hon. Gentleman aware that the action he announces is vindictive and discriminatory? Is he further aware that the cumbersome bureaucratic machinery of the Housing Act makes it difficult for even willing authorities to sell, as evidenced by the fact that in the first three months only eight councils out of 367 sold any houses at all under the scheme and that the total number of sales throughout England was precisely 49?
Why is the hon. Gentleman including Sheffield and Barking on his list of scapegoats and not the Tory Greater London Council and Tory Westminster, which have issued a lower proportion of acceptances than Sheffield and Barking? Why is he including Stoke, Wolverhampton and Newham and not the City of London, which has issued a lower proportion of acceptances than those authorities? Although his latest list includes a nil return from Camden and Greenwich, is it not a fact that it includes a nil return from his own authority of Tonbridge and Malling as well?
Instead of taking punitive action against those councils, ought not the Minister and the Secretary of State to be subjected to punitive action themselves for slaughtering the council house building programme, which is at present running at the contemptible rate of less than 15,000 a year?

Mr. Stanley: The right hon. Gentleman described the action that I announced today as vindictive. Local


authorities which seek to deny people legal rights passed by the House take action which is incompatible with our democratic practices.
The right hon. Gentleman referred to figures which, characteristically, are out of date. He totally misrepresented the position. The figures to which the right hon. Gentleman referred applied at the end of December, 11 or 12 weeks after the commencement of the right-to-buy provisions. The right hon. Gentleman distorted the position. As he knows, many authorities, including Tonbridge and Mailing, have sold several hundred council houses. Many authorities are proceeding under voluntary arrangements as well as under the right-to-buy arrangements. Their tenants have ample confidence in their willingness to sell council houses.
There is abundant evidence that many authorities have made substantial progress. For example, the London borough of Bromley has completed nearly 200 sales under the right-to-buy procedures. If the right hon. Gentleman believes that it is impossible for Labour-controlled authorities to make progress he should remember that Labour-controlled Nottingham has already issued over 1,000 section 10 offer notices and completed 200 sales under the right-to-buy arrangements.
After six months it is possible for local authorities to have made significant progress. We should compare that with the progress made by the authorities to which I referred in my statement. For example, the London borough of Camden has received 807 right-to-buy applications. The council has, in more than six months, managed to issue only 58 RTB2s. It has referred about 20 applications to the valuers. No valuations have been completed, nor have any section 10 notices been issued. The council has made no completions.
It is possible for authorities to have made more progrss. The right hon. Gentleman's response avoided the central issue of principle—that tenants have a legal right to buy their homes. That right is being circumvented and frustrated by too many councils, aided and abetted by too many Labour councillors.

Mr. Tony Durant: Does my hon. Friend agree that it is disgraceful that such action should be necessary under section 23? Is he aware that my hon. Friends believe that ordinary, working people, who merely wish to buy their council homes should have that right now that Parliament has approved it? How many houses are involved in the seven authorities which he named? How many sales of houses are being held up?

Mr. Stanley: I agree with my hon. Friend. When the Bill was being discussed we made it clear that the intervention powers were reserve powers. We made it clear that we hoped that it would never be necessary to use those powers. It is a serious reflection on the authorities concerned that the Government have to consider intervening simply to enable people to exercise their legal rights. However, we do not shrink from that.
I calculate that we are speaking of over 15,000 applications in the seven authorities to which I referred. Many of the authorities have not completed the responses to the applications, so it is difficult to calculate how many tenants are eligible to exercise the right to buy.

Several Hon. Members: rose—

Mr. Speaker: In view of what I said earlier, I propose to allow 20 minutes for hon. Members to question the

Minister. The debate on the Northern region will not start until after 5 o'clock if the opposed Ten-Minute Bill is pursued in the Lobby.

Mr. Russell Johnston: Does the Minister agree that South Oxfordshire is a desirable place in which to own a council house? Is it not therefore passing strange that at the end of February that council had still not sold any-council houses? Since no rural authorities appear on the Minister's black list, does that mean that the Government accept that their policy cannot be pursued inflexibly in rural areas?

Mr. Stanley: The authorities to which I referred are urban authorities. We look to rural authorities to allow tenants to exercise the right to buy effectively and expeditiously. South Oxfordshire has been selling council houses for many years. Hundreds of tenants have been able to buy as a result of that policy.

Mr. Peter Bottomley: Will my hon. Friend accept my congratulations on trying to deal with the devastating bigotry, brutality and insensitivity exercised by some councils? Is he aware that members of the Greenwich council, the majority of whom own their own homes, are denying that right to 2,000 applicants? Does he accept that one of the reasons for allowing people to buy their homes is to avoid the type of situation which faces Mr. Diamond in my constituency? Is he aware that he gave up his own council home to move in with his mother in her council house 11 years ago, when she was 88? He cared for his mother until she was 99 years of age and has now to move even though he had been a tenant for 11 years?

Mr. Stanley: I appreciate the trenchant way in which my hon. Friend has represented the interests of Greenwich council house tenants. The tenants in Greenwich who are seeking to buy their council houses have had as frustrating a time as tenants in almost any other authority. About 2,200 right-to-buy applications have been received in Greenwich. So far only 361 responses—or about 16 per cent.—have been received, although such responses should be made within four to eight weeks.

Mr. Frederick Mulley: Does the Minister acknowledge that the Sheffield city council and most of Sheffield's citizens are opposed to the Government's housing policy? Is he aware that the council has never taken the decision not to implement the Act? Is he further aware, as he should be as the author of the Act, that the measure has placed enormous burdens on housing departments, particularly in Sheffield? Is he also aware of the dire financial threat by the Secretary of State for the Environment that unless expenditure is reduced the rate grant will be cut and that in order to carry out the provisions in the Act more staff are needed? Sheffield has made some valuations and issued some offers to tenants who wish to buy.

Mr. Stanley: The right hon. Gentleman says that the people of Sheffield are opposed to the right-to-buy policy. However, nearly 4,000 tenants in Sheffield have already applied to buy their council homes.
The right hon. Gentleman also referred to staffing difficulties. I have in my hand what is apparently an application for two additional staff posts in Sheffield. The object is to employ two people whose main function will be to try to dissuade tenants from buying their council


homes. If it is possible for Sheffield to employ people to deter tenants from seeking to exercise their legal rights, surely it can employ sufficient staff to help people to exercise their legal rights.

Mr. John H. Osborn: Is it not a fact that the 4,000 applications would not have been registered but for the Sheffield Conservative Association, which took over the administrative work for the city council? Is it not disgraceful that no section 10 notices have been issued and that not a single house has been sold in Sheffield?
Was it not deplorable that Conservative councillors and members of the Right-to-Buy Tenants Association had to come to see the Minister to discuss whether the defiance by the Labour council was against the law? Is that not proof that Labour is against house ownership and against putting money into the coffers of a broken city's council by the sale of council houses?

Mr. Stanley: I agree that the Conservative representatives on the Sheffield city council and my hon. Friends have made an important contribution in assisting tenants in Sheffield who seek to exercise their legal rights. They have been a source of encouragement to the tenants.
My hon. Friend is right in what he says about progress in Sheffield. Nearly 4,000 tenants there have applied to buy their council houses. According to the latest information from the local authority, no completions have taken place and no section 10 notices have been issued. About 4,000 RTB1s have been sent to the council and precisely five valuations have been completed.

Mr. Robert Edwards: Is the Minister aware that the Labour majority on the Wolverhampton council has never been opposed to home ownership and is not fundamentally opposed to the sale of Council houses? The problem is that there are 9,000 people on the housing waiting list, desperately in need of shelter, and the council's Labour majority is opposed to the Government's arbitrary decision, which gives local councils no choice in the matter.

Mr. Stanley: As the hon. Member will be aware, the principle of the right to buy was exhaustively debated at the time of the last general election and during the first Session of this Parliament.
The hon. Gentleman says that Wolverhampton council is not opposed to the right to buy, but it is taking an extraordinary time in giving tenants their legal rights. I have received correspondence from the council in which it estimates that it will take, simply to issue the offer notices—the section 10 notices—to those who have already applied to buy, and where the right to buy has been acknowledged, a total of 111 weeks, more than two years simply to get to the offer notice stage. That is an unreasonable time to expect people to have to wait to get offers on their council houses.

Mr. Nick Budgen: Is my hon. Friend aware that his announcement will give pleasure and relief to over 2,000 families in Wolverhampon who have applied to buy their homes? Will he please confirm that unless the Wolverhampton council dramatically changes its attitude and its practice, he will intervene quickly after 13 May?

Mr. Stanley: I am grateful to my hon. Friend. I believe that in Wolverhampton and the other six authorities to which I have referred a real sense of hope will be given to the tenants, some of whom were believing that it would not be possible for them to buy their council houses. We can give a categorical assurance to the tenants in those authorities and elsewhere that the Government are absolutely determined that tenants shall have their legal rights and that those legal rights will be upheld.
As I said in my statement, we are writing to the seven authorities today, and we shall be waiting for the responses from those authorities to the further information that we have sought by 13 May. I have made it absolutely clear that, depending on those responses, if my right hon. Friend still takes the view that tenants in any of those authorities have or may have difficulty in exercising the right to buy effectively and expeditiously, a notice of intervention will be served.

Mr. T. W. Urwin: As the Government's policy appears to depend entirely on the sale of council houses, would not the talents of the Minister and his colleagues, as well as the resources available to them, be better utilised in putting thousands of building trade workers to work in building houses in both the public and the private sectors?

Mr. Stanley: As the right hon. Member will be aware, we have changed the rules on the utilisation of capital receipts as from 1 April this year. Those Labour authorities which succesfully and rapidly complete the sale of council houses will secure capital receipts, which they will be able to add to their housing investment programmes for the first time during 1981–82. I hope, therefore, that we shall have the right hon. Member's support in ensuring that right-to-buy sales are completed as rapidly as possible so that local authorities can get in the capital receipts and thereby add to their capital investment programmes.

Mr. Peter Hordern: Will my hon. Friend confirm that Crawley is one of the councils at which he is looking to see whether it should be included in the list of those to which he is to write serving notice, especially in view of the fact that about 2,000 applications have been made by tenants to buy their homes and that only six sales have been completed?
What does my hon. Friend think of the actions of a Labour-controlled council, some members of which bought their council homes when they were Commission for the New Towns homes and were enabled to do so, but now refuse to allow council tenants to buy their homes?

Mr. Stanley: As my hon. Friend is aware, in a number of cases Labour members of local authorities have at one time or another bought their council houses. One wishes that they would now show the same degree of support to others who want to buy their council houses.
I confirm that Crawley is one of the 27 authorities with which we have taken up formally the question of progress with the right to buy. We have received a response from Crawley. There have been more than 3,000 right-to-buy applications. We are at the moment continuing to monitor progress there, and we shall be asking that authority for regular reports on progress.

Mr. Guy Barnett: The Minister and his right hon. Friend seem to find it necessary to conduct a vendetta against the London borough of Greenwich. Is he


aware that last year the borough was threatened with being penalised under the rate support grant arrangement and was later found to be innocent, when the matter had been investigated? If the Minister wants to know why the London borough of Greenwich is slow in processing the 2,000 or so applications to buy that it has received he will find the answer in the fact that the council as a whole and the housing department in particular have obeyed the Government's demands to limit their manpower to Government targets.

Mr. Stanley: I hope that the hon. Member will look at the history of the discussions that have taken place with the London borough of Greenwich since the commencement of the right to buy on 3 October. He will be aware that Greenwich was one of the authorities which passed a formal resolution refusing to implement the right to buy. Since it decided to rescind that resolution—only after considerable delay—it has not made satisfactory progress. There is no vendetta against the London borough of Greenwich. The fact that it is listed in the group of seven is entirely of its own making.

Mr. John Heddle: Does my hon. Friend agree that those councils which seek to deny people the opportunity to exercise their own democratic rights are not friends of democracy? Will he state exactly how he sees protection being given to those tenants who wish to exercise their right to buy in the other 20 authorities, and particularly those tenants who exercised their right to buy by filling in the RTB1 forms by 3 April but who may inadvertently have done so incorrectly, thus possibly disqualifying them from buying at the August 1980 price?

Mr. Stanley: If a tenant has not completed the form correctly by 3 April, he may have lost the August 1980 valuation, but if the fact that he was not made aware of this was due to the failure of the local authority to issue the RTB2 within the statutory period the tenant may have a claim against the local authority. He would have to take legal advice about that.
As for the other 20 authorities in the original list of 27 which are not in the list of seven to which I have referred today, I can assure my hon. Friend that we are continuing to monitor progress very carefully. In some cases we are very far from satisfied with the indications of progress. The fact that it has been necessary to serve letters today on those seven authorities does not necessarily mean that there may not be other authorities in future in regard to which it may prove necessary to take similar action.

Mr. A. W. Stallard: Will the Minister accept that I remain implacably opposed to this iniquitous legislation, particularly as waiting lists and the homeless are on the increase? Is he aware that his statement today and its timing will be seen by millions of people in the country, and certainly in London, as a futile attempt to retrieve his party's credibility in time for the forthcoming local government elections?
Will the Minister accept that his omission of any reference to industrial action, which has in many cases held up the alleged sale of council houses, will be seen as a further attempt to mislead this House and the country?
Is the Minister aware that the results on 7 May, certainly in London, will be a resounding defeat for him, for his party and for the legislation.

Mr. Stanley: The hon. Gentleman says that he is implacably opposed to the right to buy. I hope that he will be even more implacably opposed to those who seek to deny people legal rights that have been granted by this House. I am aware that there has been industrial action in Camden. However, that is the responsibility of the local authority. A clear responsibility lies on the Secretary of State to ensure that all tenants receive their legal rights. He intends to discharge that responsibility.

Mr. David Hunt: Is my hon Friend aware that his firm stand against the list of councils included in what can be described only as a roll of shame and dishonour is most welcome? Is he further aware that over 1,500 council tenants in the Labour-controlled borough of Ellesmere Port and Neston have been waiting to buy for more than six months? Not one section 10 notice has been issued Will my hon. Friend agree to accept evidence about that? Will he seriously consider exercising his powers against that council if such an intolerable situation should continue?

Mr. Stanley: I am grateful to my hon. Friend for having drawn our attention to the situation in Ellesmere Port and Neston. I shall be glad to accept evidence from him or from tenants who wish to exercise their right to buy.

Mr. Nigel Spearing: Will not the speeding up of the sales of council houses with gardens in the London borough of Newham slow down the rehousing of families with children in more than 100 tower blocks that the hon. Gentleman's Department once encouraged the council to build?

Mr. Stanley: The hon. Gentleman should be aware that nearly 2,000 tenants in Newham have submitted right-to-buy application forms. He should be urging his local authority to process them as rapidly as possible in order to gain the benefit of the capital receipts that will arise from the sale of those local authority houses. The authority would then be in a position to increase its housing investment programme.

Mr. William Shelton: Is my hon. Friend aware that Lambeth has been denying its tenants the right to buy since the enactment of the legislation? Recently it has at last introduced a programme to put the right to buy into action because of pressure from Conservative councillors. Will he confirm that he will intervene if there is any backsliding by Lambeth council?

Mr. Stanley: My hon. Friend and Conservative members of Lambeth council have been extremely energetic and helpful in trying to secure greater progress in that borough. No doubt their efforts were a contributory factor, because we have been told by the London borough of Lambeth that it intends to send out all the section 10 offer notices by the beginning of October. I assure my hon. Friend that we attach great importance to adherence to, and possible improvement on, that timetable.

Mr. Frank Hooley: Will the Minister confirm that Sheffield city council has not broken any law? In those circumstances, is not his proposed action a crude piece of political bullying? Is he aware that electors in South Yorkshire will give him and the Secretary of State a robust slap in the face on 7 May?

Mr. Stanley: In chapter 1 of the Housing Act 1980 a clear statutory period of between four and eight weeks is laid down between the arrival of a right-to-buy application


form and the issuing of the response notice. In Sheffield, that time scale has not always been adhered to. The Secretary of State's obligation is to take a view on an authority-by-authority basis about whether tenants have difficulty in exercising the right to buy. It is six months since commencement of the right to buy. In Sheffield, there have been no completions or section 10 notices. I understand that only five valuations have been completed, although nearly 4,000 tenants wish to exercise their right to buy.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall call one more hon. Member from each side of the House.

Mr. Christopher Murphy: Will my hon. Friend condemn Socialist-controlled councils such as mine which attempt to dissuade tenants from exercising their right to buy by printing, publishing and distributing propaganda at the expense of taxpayers and ratepayers?

Mr. Stanley: I much regret that certain authorities seem to use their facilities to produce material to dissuade people from exercising their right to buy. However, that does not seem to have had much effect on the tenants concerned. They can see the good sense in buying their own homes, even if certain council members cannot.

Mr. Allen McKay: Is not the Minister aware that there are growing waiting lists in Sheffield and that many people are on the exchange list? Does he accept that social problems will occur from piecemeal sales? Will he put his figures right and refrain from misleading the House? By Easter, 50 valuations will have been completed and 100 interviews will have been arranged as regards interim valuations.

Mr. Stanley: I am using the latest written figures that we have received from the council. We have not reached Easter. Nevertheless, even if 50 valuations will have been completed, nearly 4,000 right-to-buy applications have been received by the city council. That is the salient point.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the New Towns (Limit on Borrowing) Order 1981 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Thompson.]

Psychotherapy (Registration)

Mr. Graham Bright: I beg to move,
That leave be given to bring in a Bill to create a Council for Psychotherapy, with power to maintain a register of practitioners and to enforce a code of ethics.
I have always believed that one of the major responsibilities of the House is to ensure that the highest professional standards are set and maintained in the treatment of the sick. Over the years, we have taken the necessary steps to maintain public confidence in the integrity of our medical and ancillary professions. The high regard in which our doctors, dentists and nurses are held and the trust which the people of Britain rightly place in them is proof of how successful we have been. The combination of legislation and regulation of the professions by bodies such as the General Medical Council is a guarantee that standards will be maintained and the public fully protected.
Unfortunately, there is one area—the practice of psychotherapy and its allied disciplines—in which the public have little or no effective protection. There is no legislation whatsoever to determine who may call himself a psychotherapist or psycho-analyst and who may offer treatment to members of the public. It is a profession that can be entered by the simple expedient of placing an advertisement in a newspaper or telephone directory. Indeed, there is no obligation on anyone practising psychotherapy to have received proper training, to possess academic or medical qualifications or to be a member of an appropriate professional body. In such a situation, abuses are inevitable.
A constituent of mine who sought help from a psychotherapist was enticed into a sexual relationship that led to the breakdown of two marriages. I am sure that similar tragedies have come to the attention of other right hon. and hon. Members. The only protection available to members of the public is through civil action in the courts, where proof that positive harm has been done to a patient has to be established. The fact that this is an extremely costly and lengthy process deters many victims of malpractice from taking that course. But even when civil action has been successfully taken by a patient there is nothing to prevent the practitioner responsible from continuing to treat other patients. It is this serious gap in the law protecting the public that I now seek the leave of the House to close by means of my proposed Bill.
The need for legislation was pointed out by Sir John Foster as long ago as 1971 in his report on the cult of scientology. It was his recommendation that inspired the appointment by the professional bodies concerned of the working party chaired by Mr. Paul Sieghart, which considered this question and reported in 1978. All the available evidence points to the fact that treatment by untrained and unqualified psychotherapists can be dangerous to their patients. There is every likelihood of wrong or inadequate diagnosis, of poor technique in treatment and of delay in using more effective methods to help people who are, for one reason or another, amongst the more inadequate in our community.
The longer such treatment lasts, the greater the danger of over-dependence on the psychotherapist and, thereby, of financial exploitation of the patient. The need for regulation to protect the public and to maintain proper


professional standards is widely accepted by reputable pychotherapists. It is our responsibility to help to bring to an end the long and unnecessary delay in taking action.
The Sieghart committee's proposals provide the framework within which that objective can be achieved. Because they rest on a wide measure of agreement between professional bodies such as the Royal College of Psychiatrists, the British Association of Psychotherapists and others, I have made these proposals the basis of the Bill. They are essentially along the lines of those by which other professional bodies, such as those ancillary to medicine, are controlled. The instrument through which regulation might be achieved would be a statutory body to be called the Council for Psychotherapy. Its members would be recruited by nomination from among a wide range of professional societies, including, perhaps, more behaviouralists than were originally represented on the Sieghart committee. The Secretary of State for Social Services would also be involved, together with a lay element. Later there would be elected members.
The council would have the duty of maintaining a register of recognised practitioners of psychotherapy and allied disciplines the power to enforce a code of ethics and to approve training courses. There is nothing remarkable about such responsibilities and powers. They are comparable to those granted to the board created by the Professions Supplementary to Medicine Act 1960. If those who fit hearing aids or who practise remedial gymnastics are subject to regulation by statutory bodies, I see no reason why psychotherapists should continue to escape effective control.
I take the view that the public are entitled to know what, if any, are the qualifications of those offering treatment in this delicate area. The creation of a statutory register would ensure that this could be done. Not only would the qualifications of a practitioner be stated and known, but so would the professional name—psychotherapist, analytical psychologist and so on—under which he or she offered treatment.
It would be an offence for anyone not on the register to offer treatment under the professional name. There would no longer be uncertainty in the minds of the public. Patients would at long last be offered protection against unscrupulous and incompetent practitioners and the standards and status of genuine experts would be enhanced. The invaluable work of those involved in social work—such as marriage guidance counsellors and ministers of religion—would not be affected at all. Obviously, there would have to be careful consultation between the professional bodies concerned, such as the Royal College of Psychiatrists and the British Psycho-Analytical Society, and the Department of Health and Social Security on the criteria for registration, and some allowance would initially have to be made for existing practitioners of repute without formal academic qualifications. But I have no doubt that such problems can be solved. Subsequently, the criterion for inclusion on the register ought to be the successful completion of a course of training endorsed and approved by the proposed council. When new disciplines arise in this field, it should be possible for their representatives to find places on the council, perhaps through the mediation of the Secretary of State. I believe that in a developing area like this it is wise to be flexible.
Whatever machinery the House might think it right to set up, two measures should be included. The Council for

Psychotherapy envisaged in my Bill would need to be able to assess existing training courses in the various disciplines as qualifications for registration and to have the power to approve them and any new courses that might be devised in the future. But more important still would be its duty to institute and enforce a code of ethics.
It is the element of exploitation by the charlatans in this field that leads to real harm to their patients in the present circumstances. I cannot imagine that sexual or financial advantage could be sought by any genuine practitioner, and I would certainly condemn any course of treatment given without a patient's knowledge and consent. If there should be a code of ethics, the duty and means of enforcing it should be in the Council for Psychotherapy's hands. The professional sanctions of reprimands, suspensions and, in grave cases, expulsion from the register should be available.
I am sure that the House will agree that there is a gap in the law to be filled. The means of filling it have been suggested by the Sieghart committee. We should not be deflected by the protests of those who would find themselves unable to continue their activities if legislation on these lines were passed. It is fair to say that the machinery to tackle the problem has been devised. Perhaps there may be details which require further discussion. But what matters to the profession, to the House and to the country is the protection of the patients. That ought to be the overriding consideration.
The need to act was clearly spelt out 10 years ago. Every year that we delay means that there are more cases of malpractice by bogus or unqualified practitioners of psychotherapy. The fact that we have waited nearly a decade for a solution to the tragic problems that so often arise means that we cannot afford to wait much longer. I ask the House for leave to bring in the Bill.

Mr. Stan Thorne: I shall be brief because I know that hon. Members wish to move on to the important matter affecting the North of England. However, while I fully subscribe to the view that protecting the public is an aim that the House should fully uphold, I submit that the proposed Bill is not the way to do it. The final paragraph of the suggested Bill reads:
The Council for Psychotherapy shall have the power to proscribe the use of any psychotherapeutic, psycho-analytical or other professional technique or method of treatment by persons not on the statutory register or not medically qualified.
That goes much further than the proposals of the Sieghart committee and would have a profound effect on clinical psychologists. It would make it impossible for anyone to work as a clinical psychologist unless he were on the proposed register or authorised by the registrar. The clause would be unworkable as it would be impossible meaningfully to define any psychotherapeautic, psycho-analytical or other professional technique or method of treatment. For example, a nurse talking or even listening to a patient would be covered by the term, as would a clinical psychologist carrying out any kind of behaviour therapy.
The clause is clearly unfair and discriminatory in excluding the medically qualified from the need to be registered. It would be patently absurd to maintain that a consultant pathologist could use any such technique with impunity, whereas a clinical psychologist could not.
The Sieghart proposal on the registration of psychologists was descriptive, that is, non-registered


psychotherapists could not call themselves psychotherapy-ists. The proposed Bill is proscriptive—that is, people would be proscribed from performing psychotherapy unless registered. Such a proposal would be unfair and unlikely to have a good effect on patients. It would be unworkable in practice and highly detrimental in a straight forward trade union sense to members of my association. On those brief grounds I believe that the House should not agree to the hon. Member's wish to introduce the Bill.

Question put

The House proceeded to a Division—

Mr. CHRISTOPHER MURPHY and Mr. DAVID ATKINSON were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. DEPUTY SPEAKER declared that the Ayes had it.

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Graham Bright, Mr. Clinton Davis, Mr. John Loveridge, Mr. David Atkinson, Mr. Michael Colvin, Mr. Leo Abse, Mr. Richard Page, Mr. John Carlisle, Mr. David Mellor, Mr. David Madel and Mrs. Sheila Faith.

PSYCHOTHERAPY (REGISTRATION)

Mr. Graham Bright accordingly presented a Bill to create a Council for Psychotherapy, with power to maintain a register of practitioners and to enforce a code of ethics: And the same was read the First time; and ordered to be read a Second time upon Friday 12 June and to be printed [Bill 122].

Orders of the Day — SUPPLY

[17TH ALLOTTED DAY]—considered.

Northern Region

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

Mr. Mark Hughes: It is a source of particular pleasure that you should be in the Chair, Mr. Deputy Speaker, as we debate the problems of the Northern region, because no hon. Member has been more assiduous in seeking to find solutions to those problems.
I should say at the outset that because we have lost the better part of two hours of the debate I have no intention of giving way during my brief speech. It is as well for hon. Members to know that in advance. Secondly, we understand and accept that the Minister of State, Department of Industry, has other duties, including meeting the National Enterprise Board and British Shipbuilders, which will inhibit him from being present throughout the debate.
The Northern region was a problem area long before I was born. The basic, classic industries of coal mining, iron and steel and shipbuilding were in difficulties before I was even a twinkle in my father's eye. What happened was epitomised in the career of Charles Mark Palmer who, starting with a coal mine at Marley Hill and the coke works associated with it, created from nothing the town of Jarrow to turn that coke into iron, steel and ships. He bought the ironstone mines to provide the iron, created the shipyards and produced what Carnegie described as the most elegant vertical integration in the world's history. He owned every ironstone mine, every coal mine and all the intermediate stages of the production of ships, which he sold at a profit on the world market.
The pattern, apart from Palmer himself, could be repeated throughout the Northern region. A great industrial empire was created on the indigenous facilities and natural resources of the Northern region—coal, ironstone and human skills and ingenuity. In 1851 the population of Jarrow was less than 1,000. Because of the skills and entrepreneurial drive of Palmer and his associates the population had reached tens of thousands by the turn of the century, and people were employed by him at Marley Hill and on the Cleveland hills.
After 1920 the classic cry "Do you want to buy a battleship?" rang a little hollow. The skills at the apex of that edifice were no longer required and even in the 1920s, if people did not want to buy the product of Palmer's yard at Jarrow, it was not just Jarrow which suffered, but the steelworks behind the town, the rolling mills, the cokeworks, the coal mines, and so on. The same story could be retold throughout the Northern region.
The run of towns in North-West Durham—Tow Law, Spennymoor, Willington, Crook and Witton Park—and in West Cumbria created, on the adventitious accident that they had both coking coal and ironstone in abundance, communities that exploited those resources with


extraordinary skill. Throughout Cumbria and the North-East, the skill and initiative of local managements and local labour forces kept that going for many generations. In my constituency it is difficult to realise, as one drives through West Cornforth, better known as "Doggie", that it was the biggest rail-producing centre in the world in the 1850s.
All that was an economic development created from within the region, with the region providing the entrepreneurial skill, the capital, the labour and the profits. We did not import entrepreneurial skill and at no stage since censuses started in 1801 has any county had more of its population born within its boundaries than County Durham. It has been an inbuilt society and, with the collapse of much of that after the First World War, the problems arose.
Those problems were not only economic. They were, and remain, problems of unemployment in the basic industries. Consett is only the latest in a terrifying line of steel towns that were created out of indigenous raw materials on site which survived for some time by the skill and initiative of local people. However, unemployment was a problem at the time of my birth and it remains a problem. In December last year, unemployment in North-West Durham was 22·4 per cent. and there is every probability that in an area such as Consett unemployment will rise to between 40 and 50 per cent. in the foreseeable future.
The problems extended beyond unemployment. They occurred in housing and in settlement patterns, producing a series of pit villages that have many of the problems associated with inner cities but are excluded from inner city aid. The problems of many of the larger mining settlements such as Ashington, Hetton-le-Hole and Houghton-le-Spring are analagous to the problems of inner cities. However, because they are mining settlements and the settlement pattern is different, they are excluded from Government aid for inner cities.
In education, an unwillingness to take up education beyond the minimum school leaving age became a pattern of life for far too many children. Because job opportunities without CSE and O-level requirements existed, the pressure to leave school grew. No tradition was established of taking up higher education or even rudimentary sixth form education. Figures for as late as 1979 show that whereas in the country at large 27 per cent. of 16-year-olds stayed on at school the figure in the Northern region was as low as 18·8 per cent. This is another part of a long, ongoing set of problems.
This situation spills over even more into the problems of health. I need only refer to the recent report of the research working group under Sir Douglas Black on inequalities in health. The report recommended that 10 areas with high standardised mortality ratios should be the subject of a special health and social development programme costing £30 million in 1981–82. Four at least of those 10 worst areas are in the Northern region—Gateshead, South Tyneside, Durham and North Tyneside.
The decision of the Government not to accept the proposals contained in the report has a particularly adverse effect upon the Northern region. Not only do we suffer unemployment; our health is at risk. The same situation, without going into further statistics, applies to neo-natal mortality. Over a whole range of problems the social consequences of an earlier dependence upon coal, iron and

steel, and shipbuilding have left deep scars that are far from being healed. The unwillingness of the Government to take action is the cause of some offence.
To deal with these problems, as far back as three days after I was born, Mr. Harold Macmillan, the then Member of Parliament for Stockton, proposed a set of Government measures. Those classic proposals have been central during the last 20 years to a bipartisan approach by Governments to the industrial problems of regions such as the North. This has led to the introduction of alternative industries to widen the economic base of the region by means of assistance, bribery, grants and taxation allowances, the providing to local authorities of moneys to alter the settlement pattern and to improve the infrastructure through improved roads and the cleaning-up of pit heaps, and to the providing of increased opportunities for industrial training.
For about 50 years, there existed a broad area of bipartisan agreement over how to embark on this process, although deep divisions existed over implementation. Since 1979, there have been considerable signs that this bipartisan approach has declined, changed and turned on its backside. We are now told that a solution to the problems of the Northern region can be found only through market forces being given free rein. Many of the policies associated with Lord Hailsham and others since the 1960s have achieved considerable success. No one living in the Northern region can doubt the improvement in the quality of life that has occurred in the last 20 years. The people have better housing. They have a cleaner environment.
I was amazed when I was told by Courtaulds in the Select Committee on Industry eight years ago that one of the reasons the company came to Spennymoor was the clean air. That view rings a bit sick in view of later events. It was, however, one of the reasons why the company came to Spennymoor.
The creation of new towns at Peterlee, Washington and Newton Aycliffe helped. New road structures have been a major influence in improving the lot in the Northern region. However, in the last 20 to 36 months—I must be fair and say that the change in Government in May 1979 is not a total break-point and that fears existed before the change—a new and far more formidable set of regional problems has assailed the Northern region. We are no longer faced with the problem exclusively of replacing the rundown of classic industries. That problem has not been solved. Anyone visiting Consett who believes that the provlem of the rundown of a classic steel town has been solved or that Government, local or national, know what to do about the issue, delude themselves.
In the last months a terrible and worse affliction has started to blight the Northern region. We have become, in part as a consequence of conscious Government decision, a satellite economy for multinational corporations. Many of the decisions affecting jobs in the Northern region are now taken in Eindhoven or Minneapolis. We are on the outer extremities of space in the Northern region in too many of our industrial concerns. If there is a circulation problem gangrene usually afflicts the toes before it affects the more vital organs. It is none the less fatal.
If multinational companies need to rationalise they close their Northern factories on the periphery first. I have already mentioned the problems at Courtaulds. that company has spent a lot of public money—with pleasure, I assume. Yet it fled the region at the first sign of difficulty. The decision to do that was not taken in Durham


or Spennymoor or West Cumberland. It was taken outside the region. The decision-making has been moved away from the Northern region, with the result that many people in the North feel totally alienated. That is as true of management as it is of the work force. Local management does not know what its masters elsewhere have in mind for it. It has no security. Thus, it cannot give its work force any hope of security, in terms of long-term planning or investment.
I do not wish to embarrass my hon. Friend the Member for Easington (Mr. Dormand), but I give as an example a firm in Peterlee—Tudor Crisps. The factory was set up to manufacture potato crisps—a perfectly proper, small-scale industry in a new town. In seven years it has had four different owners. It has been moved about on the accountants' chess table with no reference to what is happening in Peterlee or to the work force or management there.
The pattern that has been established is causing a different kind of unease in the Northern region, a different kind of alienation from the one to which we thought we had the answer when we had only the problems of coal, iron and steel and shipbuilding. At least we thought we had an answer then. Now the answers are quite removed from our control. No decisions that effectively control the future of the Northern region are taken in that area. They are taken elsewhere. Fifty years ago, even if the decisions were wrong, at least they were taken in the Northern region.
In fairness, I must admit that it is no better in many of the nationalised industries that it is in the multinational corporations. I do not claim that local decision-making in nationalised industries is significantly better in terms of what is allowed to be done than it is in multinational companies. The coal industry is a major exception to that rule, but that is a matter of judgment.
Many of the people in the area feel alienated. They say—quite wrongly—that nothing that any Government have done over the past 20 years has made any difference. That is rubbish. Considerable advances have been achieved between 1960 and 1980 in terms of better housing, better health and more job opportunities.
What do we face now? As a consequence of the Government's policies, the industries that were brought in with Government money are creating the present unemployment. Those are the jobs that are being lost. We cannot hold on to the replacement jobs because we are satellite industries. We have too many satellite factories and it is easier to pull back to somewhere more congenial.
I give example of Ransome Hoffmann Pollard—a ball bearing factory at Annfield Plain. There is no evidence that it was less efficient in the production of ball bearings than the others. The evidence is that it was somewhat more inconvenient for senior London-based management to go and look at it. That is the way in which rationalisation pulls back, to the convenience of higher management. That is what worried me.
Finally, there is the role of Government. Government cannot escape, either passively or actively. The Government are a major employer. In January 1980, the Civil Service, by industrial categories, represented 708,000 people, of whom about 40,000 worked in the Northern region. But when the Government decide to cut back on everything except defence, they must realise that

they are maintaining or increasing employment in defence. That, I assume, is their intention. The total payroll in Government defence establishments in the Northern region is 6,300, out of a total of 240,000 civil servants.
When an additional £1 million is spent on defence it does not go to the Northern region; it goes to the South-East. That is intentional counter-regional policy. If it is not intentional, the Government do not know what they are doing. If one spends those wages, there is a 0·7 per cent. spin-off effect of additional jobs elsewhere. It was open to the Government to transfer Civil Service jobs in the Ministry of Defence to the Northern region—to places other than the South-East. However, the Government chose, as an act of policy, not to do that, and that increased expenditure on defence further disadvantages the Northern region. The imbalance is the same in economic services—housing, and so on. The failure to move Civil Service jobs, even at this limited level of Government activity, disadvantages the Northern region.
Beyond that, the whole machinery of government is tilted against the interests of the Northern region. Many of the problems that I have outlined exist in Wales or Scotland, but there the civil servants have a career interest in knowing about, caring for and seeking solutions to the problems of those areas. They see a career in the Scottish Office or in the Welsh Office. It is difficult for any civil servant on the mainland of England to see a career in that set of terms as helping the Northern region. They are moved about ad hoc, from pillar to post. The Welsh and the Scots have a development agency. That does not add an extra tier of government, and none of us in the Northern region is asking for a development agency as an additional tier of government. However, such an agency would bring together forces and focus on the problems of the Northern region.
Summing up, what is terrifying is that the new economic disaster afflicting the North leaves the North with an increasing sense of alienation, with the feeling that it is not cared for. It may be mistaken in that. Fine words may well indicate the opposite. But what is quite clear is that the people of the Northern region feel that they can have no effective say in their own economic destiny.
If that continues for too long the future of effective democratic government in Britain diminishes. It is a recipe that will cause discord. The problems of the Northern region, both economic and social, require urgent reconsideration by the Government.

The Minister of State, Department of Industry (Mr. Norman Tebbit): First, I follow the hon. Member for Durham (Mr. Hughes) in his well-justified compliment to you, Mr. Deputy-Speaker, and your role in the past in the affairs of the North of England.
Secondly, I thank the hon. Gentleman for his understanding of the difficulty that I face today. Had I known for how little time I should be able to be present to listen to this debate when it was decided that I was to speak, I should have persuaded someone else to do so, because I feel that there is an element of discourtesy, albeit unintended, on the part of a Minister who speaks and then does not hear what others have to say. I undertake to read Hansard tomorrow more assiduously than I normally do.

Mr. Jack Dormand: Easter reading.

Mr. Tebbit: Indeed, as the hon. Gentleman says.
The House welcomes an opportunity such as this to discuss the economic and social problems of the Northern region. It is some time since we last discussed the region. The hon. Member for Durham has set the tone of the debate in serious and reasonable terms. I disagree with parts of what he said, but I think that what he said was such as to provoke thought of a slightly deeper sort than often goes on in this type of debate, and I welcome that.
Although I am a Southerner, I understand the feelings, which might be described as peripheral alienation, to which the hon. Member referred. This is a complex matter, as he well understands. I should not want him to believe that those who live in the North of Scotland or in the farther parts of Wales are convinced that the civil servants who inhabit the offices in Edinburgh or Cardiff fully understand their problems. That does not make the problems of the North-East any better, but it suggests that it is not easy to find a solution to them without changing the geography of the United Kingdom—which I think is beyond the capabilities, happily, of any of us.
Whether or not the hon. Member intended to do so, he questioned the effects in the long term of what we had done in terms of regional aid. I do not question the need for regional aid. However, it behoves us all to question whether the aid that has been given has in the long term been as effective as it might have been had we been a little cleverer in the way in which we distributed it. I am not saying that we have any great new wisdom to offer on that subject; I do not believe that anyone has at present.
When we came into office we reviewed regional industrial policy very carefully. In carrying out that review we were conscious of the problems of parts of the Northern region. The changes that were announced in July 1979 by my right hon. Friend the Secretary of State for Industry were designed to ensure that assistance was concentrated in the areas that most needed it. That applies particularly to places such as Consett, Hartlepool and Sunderland, where many of our traditional industries, such as steel and shipbuilding, are based.
Incidentally, I welcome the fact that the top management of British Shipbuilders now spends its time predominantly in the North-East and has got rid of a large number of expensive offices that it had acquired in London. That shows a degree of sensitivity to the needs of the regions as well as a degree of understanding of the need to keep down unnecessary overheads.
In these areas, which remain special development areas, regional development grants of 22 per cent. are available. Firms investing there are eligible for assistance at the highest levels in Great Britain. The reductions in the coverage of the assisted areas, which are taking effect over a three-year period ending in July 1982, together with greater differentials in the aids available to industry in the different categories of assisted area, are intended to ensure—I believe that they will do so—that those that retain that status will be relatively more attractive to industry. Thus, regional policy, in its conventional terms, can be more effective for being the more concentrated. I take the hon. Member's point that it might thereby run the serious risk of bringing in from the outside the subsidiaries of major companies that may not have such an attachment to the area as would the domestically grown and natural product.
Of course the Northern region could not have any special immunity from the reductions in assisted area coverage, but there are good transitional arrangements for

those areas to be down-graded. Even after the assisted area changes come fully into effect next year, over 88 per cent. of the population of the Northern region will continue to live in assisted areas, and no less than 81·5 per cent. of the population will be in special development areas and development areas. This is the second highest proportion in Britain after Wales.
The proportion of the Northern region covered by assisted areas is a measure of the region's problems. I share and understand the concern at the levels of unemployment in the region, and that concern is recognised in our regional policy, which gives such a high priority to the North of England. But regional policies alone cannot cure the problems. We have to tackle their underlying causes in many ways. The lack of competitiveness of British industry, which has developed over the years for a number of all-too-familiar reasons—wage increases that companies could not afford, restrictive practices, reluctance to change, not only on the shop floor, by any means—unwillingness to seek new markets with new products, and unwillingness to accept new techniques—again not only on the shop floor—is among those causes.
Inflation rates well above those of our competitors, to which Governments have contributed by over-spending and over-borrowing, have pushed up interest rates and inhibited investment. That is why the defeat of inflation is still central to our overall economic policies. That is vital to the country as a whole, but the Northern region above all desperately needs lower inflation and interest rates for its industrial recovery, not least because, as the hon. Gentleman said, when times are hard it is the periphery that suffers most. It is the economies, the regions and the industries and firms that have been weakened by past errors and failures that are most likely to be felled by inflation and recession.
It cannot be said too often that the best regional policy for any of the disadvantaged areas of our country is to create conditions from which the national economy can recommence soundly based growth. I have no doubt that there is enough drive and innovation, not least in the North, to nourish competitive firms that can make quality goods that customers want, at competitive prices, as they did in the past, given low inflation, sensible interest rates and steady currency exchange rates.
Naturally, after long years of failure there are pessimists who believe that it is our destiny to be the poor relation of Europe. They say that we can survive only in a siege economy, behind trade barriers with pay and price controls. Opposition makes a pessimist of any of us. If I may say so, there is a particular reason for pessimism in the Opposition's problems of the day. Equally, there are signs of success in the economy. The rate of inflation is coming down, and with it interest rates.

Dr. John Cunningham: Are the Government claiming success?

Mr. Tebbit: Does not the hon. Gentleman enjoy the success in reducing the rate of inflation?

Dr. Cunningham: What success?

Mr. Tebbit: The hon. Gentleman may not like the fact that inflation has fallen over each of the past 10 months, but most others do. Inflation rates are not set by the events of the weekly or the monthly report. It was primarily the


monetary growth, the excessive Government spending and the excessive commitments to Government spending that we inherited that launched inflation at a much higher rate.

Dr. Cunningham: Why increase the rate of VAT?

Mr. Tebbit: There was a requirement to raise the revenue that we needed to finance the expenditure that we inherited.

Dr. Cunningham: The Minister is going back to his old ways.

Mr. Tebbit: As I have said, the rate of inflation is coming down. There is an accompanying fall in interest rates. There is more evidence of a rational approach to wage settlements on the part of managements, unions and work forces alike. There is plenty of evidence that some of the old, crazy, self-defeating and job-destroying restrictive practices are crumbling in the face of the new realism on the shop floor. The hon. Member for Workington (Mr. Campbell-Savours) chooses to laugh. There have been enormous increases in output per man hour in the steel industry in South Wales. What has happened at BL? Goods are now produced on time and at the right quality, as they never were before. The hon. Gentleman would be better to applaud that progress than to sneer at it.
It is highly dangerous to read anything into one month's figures, but the first rise in the index of production since November 1979, which was announced on 13 April, gives some further substance to the hope that we are at or near the bottom of the recession. It could be a misleading figure. It is not incompatible with a continued decline. However, it is far from incompatible with the behaviour of both the longer and the shorter leading indicators and, indeed, the coincident indicators, over recent months. I do not want to oversell any optimistic forecasts of spring, but I think that it is right that at least some of the pessimism should be tempered.
Labour Members often make much of the activities of the Scottish, Welsh and Northern Ireland Development Agencies and, indeed, of the Scottish and Welsh Offices. The guidelines given to the National Enterprise Board by my right hon. Friend in August 1980 asked the board to play a catalytic role in industrial investment in the assisted areas for a purpose similar to that of the Scottish and Welsh organisations. The derelict land clearance powers of the development agencies rest in England in the hands of local authorities. Similarly, the functions that are enjoyed in Scotland and Wales for promotion and publicity rest in Northern England with the North of England Development Council.
Our purpose is to use, especially through the NEB, the limited taxpayers' funds that we can make available to encourage or induce greater amounts of private sector investment. The first such venture, the Anglo-American Adventure Fund, is seeking investment opportunities in the North as well as in other regions. It is getting off to a good start, and I hope that it will be followed by others.
We have established two northern enterprise zones, at Hartlepool and Tyne and Wear, which have been warmly welcomed. The Northern region has benefited more than any other area in England from my Department's funding of the English Industrial Estates Corporation's factory

building programme. About 70,000 are employed in the region in the corporation's factories. That is over 75 per cent. of the total throughout England. There are over 200 units, totalling 2 million sq ft.
Under the Industry Act 1980 the corporation has power to raise private sector money, and at Team Valley, Gateshead almost 180,000 sq ft. of factory space will be available under a scheme with the Legal and General Assurance Company. More schemes are on their way.

Mr. Harry Cowans: There are empty factories.

Mr. Tebbit: On the contrary. In Team Valley two small and local firms have achieved considerable success. Reid Furniture doubled its floor space, and Shaws Biscuits doubled its work force. I accept that those are small firms, but Palmers did not start as a great multinational company. It began as a small operation and it grew. It is possible that the fault that we have had in the North and in other regions in recent years has been an abnormally low rate of creation of new small enterprises. We have done too little to encourage them and perhaps too much to encourage monsters to come, and sometimes go.
The EIEC's small workshops have been successful at Sunderland and at Jarrow, and there will be 24 more units at Stanley. Consett will have another 42 units. The units are going well, especially the smaller ones. The corporation spent £14·7 million in the region. That is not a huge sum, but it is important in giving new businesses the chance to get started. I know that my hon. Friend the Under-Secretary of State for Industry—the hon. Member for Norfolk, South (Mr. MaGregor)—will want to say much more about that if he has the chance to do so.
In the shipbuilding industry, in the past six months British Shipbuilders has announced orders for North-East yards of seven ships totalling 144,000 tons. Since May 1979 we have offered North-East shipyards over £75 million to assist them in tendering for 40 ships totalling 600,000 tons. I know that Labour Members will be immensely cheered, as I was, to read the most encouraging annual report and forecast of Northern Engineering Industries that appeared in the press today. It seems to be most encouraging, because it embodies a measure of hope in intelligent Government purchasing and a great deal of exporting success by that company.
We continue to support a range of schemes to keep jobs that would otherwise be lost and to provide training and work experience through temporary short-time working, job release schemes, the community industry scheme, the youth opportunities scheme and the special temporary employment programme. I accept that those schemes do not respond with an answer to the deep problems of the area. However, since we came into office in May 1979 £175 million has gone into regional development grants, a third of the total of RDGs for Great Britain. About £55 million has been offered in regional selective assistance to support projects totalling almost £500 million. In 1979–80 alone the aid to the Northern region—this is regional aid—amounted to nearly £48 per head. That was considerably more than in other parts of the country. It is nonsense to suggest that those cunning Welsh and Scottish civil servants are doing something for their countries' or regions that we in the Department of Industry are not able to accomplish.

Mr. Cowans: What are their unemployment figures?

Mr. Tebbit: Unemployment figures are by no means low in Scotland or Wales. Expenditure per head in Wales in 1979–80 was £36. In Scotland it was £23·6, and in the North-West it was £34. None of those regions is without its problems. Even if unemployment is not always as high in those areas as it is in the Northern region although it sometimes is in patches they suffer even more from the regional disadvantage of distance from the wealthy South-East. Therefore, surely it is not true that we have left, or are leaving, the North of England solely to market forces. Those figures give the lie to that suggestion.
The suggestion that is sometimes made that a Minister for the North is needed to even up with Scotland and Wales, which have their Secretaries of State in the Cabinet, is not tenable in view of those figures. It would only result in calls for more bureaucracy, with Ministers for the North-West, the Midlands, the South-West and East Anglia, and perhaps London, which is not without its problems and which is the largest region in the United Kingdom in terms of population. The result of such things would be little but extra bureaucracy and costs, not more lasting productive jobs.
If any positive proposals were forthcoming for the better use of existing resources and for improved liaison and more effective co-ordination to make more of promoting the North I should, as ever, be willing to consider them, as the hon. Member for Easington (Mr. Dormand) knows. That was the invitation that was left with him, that if he had proposals for how those existing resources could be used more effectively and the existing institutions improved, I should be happy to hear them. I am not saying that I should necessarily be convinced. I am sometimes a hard man to convince. However, I should be willing to consider such proposals.
At the end of the day, the future of industry and employment in the Northern region is at least as dependant upon the abilities and the attitudes of those who live and work there as upon the agencies of government. This morning I carefully considered whether I should say what I had thought of saying, but I decided not to. Perhaps a changed decision is a bad decision. I thought that it might come ill from a Southerner to say it—that is why I hesitated. When the need for more firms and Government Departments to be more firmly rooted in the North of England is referred to, I believe that it is a pity that often the North of England does not sell itself better. There are immense attractions in the North of England, which are not understood by those who do not know it. When I hear people say that they would not move their firms there because not only do the staff or the civil servants in the Department not want to work there, but their wives and children do not want to be there, that is most depressing. It is depressing that people should have that idea about the North of England.
For my part, if I were not so tied to London, and if I had the privilege of being born a Notherner, instead of that of being born a Southerner, I can think of no more attractive place to live, provided that there are jobs.

Mr. D. N. Campbell-Savours: Why does not the hon. Gentleman stand as a Tory in Workington?

Mr. Tebbit: The hon. Member should not tempt me. I might come to defeat the hon. Member one day, when I get bored.
I hope that those who represent the region—both hon. Members and those in local authorities—will not dwell only on the difficulties and disadvantages of the North and of those who live there. When I talk to the would-be investors at home and abroad, it is not helpful to find that their view of the attractions of the North has been distorted or damaged by what has been said by some of the representatives of Northern England.
We are not leaving the North to market forces. We shall continue to use regional aid to support the region and to seek to engender new jobs. However, I share the hon. Gentleman's misgivings about the shape and form in which some of those jobs have come in the past. That is why I am particularly anxious that more smaller firms should be established, because if they are not there will he a repetition of those problems in 20 or 30 years' time and there will still be somewhat depressing debates about the fate of the regions, not least the North of England.

Mr. Arthur Bottomley: It gives me great personal pleasure, Mr. Deputy Speaker, to address you as such.
The Minister said that my hon. Friend the Member for Durham (Mr. Hughes) had made a thoughtful and constructive speech. I agree. In his reply to my hon. Friend the Minister said that the North could do more to help itself. We are conscious of that, and at times we have tried to do so. Perhaps the hon. Gentleman, with his desire to help us in that endeavour, will ensure that the Government give more money to the North of England Development Council and the various agencies which are now relatively bankrupt. We cannot let it be known that the North is far better than most parts of the world—I have travelled fairly extensively—and as good a s any region in this country. Like the Minister, I speak as a Southerner. Let me appeal to him as my Member of Parliament to do all that he can to help the North.

Mr. Tebbit: It is always a privilege to intervene in the speech of one's constituent, even if he did not necessarily vote for me on the last occasion. We want to continue to do what we can to assist the Northern region, but the hon. Gentleman will not forget that I said that the most effective and vital form of help is to continue the programme of the defeat of inflation, which means a commitment to continue to control and reduce public expenditure.

Mr. Bottomley: Certainly inflation should be reduced. I shall come to public expenditure in a moment, on which I beg to differ.
First, I shall deal with a matter that affects—not only the North but the country as a whole, the acute unemployment situation. Unemployment is the most soul-destroying state that man can endure. It takes away his dignity and makes him feel that there is no place for him in society. I know that from my experience in the 1930s. It is incredible that a generation that can achieve the scientific wonder of launching the space shuttle "Columbia" and returning it to earth should be unable to devise a scheme for the just and equitable arrangement of our economic affairs.
Long hours of work are no longer necessary to do the world's work. With the increasing development of automation, it is inevitable that computers and robots will


do much of the work previously done by human beings. That development will affect our lives in our homes as well as in the factories.
I was most disappointed that the microelectric factory did not come to the North-East. I am sure that my fellow Members in the North will wish to join me in paying tribute to Councillor Mrs. Maureen Taylor, under whose chairmanship the North-East Development Council, as it was, did so much to attract industry into the area.
It is important that we should put our minds to producing the goods required by the world, at the right price, and with firm delivery dates. The Government have a duty to channel investment into such industries. The National Enterprise Board is the best method of achieving that.
Britain's share of the world market in manufactured goods has decreased in the last decade. Achieving growth in the economy by 1 per cent. would mean obtaining the equivalent income from North Sea oil and the further employment of 40,000 work people.
The Government constantly urge, as the Minister did a moment ago, the cutting of public services. That is not only economically unwise; it is unfair to some of the most dedicated people in the service of our country. An unemployed nurse, teacher, social worker or road man costs the State more than if he or she were employed. Unemployment benefit, loss of taxes and social security payments can amount to more than that person's wage, without counting the overall economic cost to the community of loss of output and services and the loss of morale for the unemployed person.
I have urged the promotion of a national development loan. The Government could appeal to the nation to subscribe to a policy of national development to clean up our decaying inner cities, to exploit every bit of wasteland and to provide new amenities for our people.
In Cleveland, where my constituency is, the most serious economic problem is the rapid increase in unemployment as the recession deepens, as it is elsewhere in Britain. Registered adult unemployment has increased by 13,500 in the past year. Unemployment is almost four times greater than it was in February 1975. It was then only 4·7 per cent.; and is now 10 per cent. higher. Cleveland has the highest unemployment in the country.
School leavers and other young people are severely affected, and 3,050 young people are registered as unemployed, which is 57 per cent. more than a year ago and four times as many as in 1975. In addition, 4,732 young people are engaged in special schemes, such as the youth opportunities programme, which brings the total of young people without permanent employment to 7,800.
The apprenticeship system has been severely affected by the recession. Only 1,083 apprentices were recruited throughout Cleveland in 1980, compared with 1,542 in the previous year. A further fall in recruitment is anticipated for 1981. That means that we are not training the skilled engineer to provide the services required for the future. Able-bodied young people are being denied the opportunity of full employment that they deserve. It is sad to reflect that that means deep frustration and bitterness and the thwarting of youthful hopes and aspirations.
When I first became the Member of Parliament for Middlesbrough, East in 1962 I urged that we should develop services to enable young people to enter clerical

and administrative work. In the main, it was heavy industry. I suggested that a Government Department should go to the North, preferably to my constituency. In due course I persuaded the Government to agree that the Property Services Agency should move to Middlesbrough from London. The dispersal of the Civil Service from London was not a party matter. It was decided by both parties, so it is all the more regrettable that the Government stopped the plan from developing, after Middlesbrough council had spent hundreds of thousands of pounds getting the site ready. I shall continue to press the Government on the matter. I shall also do all that I can to make sure that a Labour Government will go back to the plan.
The Minister mentioned civil servants in Wales and Scotland and the fact that the system was not wholly satisfactory. In the North we need a structure similar to those in Wales and Scotland to enable civil servants to work and to be promoted in the region, without the bright ones having to come to London. It is no longer necessary to keep civil servants in London, as communications are now so simple. I hope that the Minister will remind his colleague that the Property Services Agency is still wanted in Middlesbrough.
My constituency has suffered badly from the recession. The steelworks have been run down and thousands are unemployed. Mr. Bill Sirs today said that neither Parliament nor his union knew how many cuts would be made and that we could expect thousands to be made unemployed in the not-too-distant future. When an opportunity presents itself, I shall raise that matter with the appropriate Minister. Shipbuilding, heavy industry and ICI are all losing workers. It is no wonder that in Cleveland we have the highest unemployment in England. I plead with the Minister to ease the situation by getting the Datsun car factory to come to the North. I should like it to come to my area, but as long as it comes to the North we shall be happy.
Another matter of vital interest to my constituents is that the Darlington to Saltburn railway line is kept open. Without it Middlesbrough is cut off from the main railway centres. The Esk to Middlesbrough line is also necessary for local residents and is good for the tourist trade and can earn us foreign currency. I hope that that, too, will remain open. The Secretary of State for Transport says that the money must be found from the subsidies already allocated, but the amount provided is nothing like enough to meet the needs of the service.
The Government must act soon, in the interests of the country. We are losing valuable skills, morale is deteriorating and many young people are being deprived of their right to a useful place in society and a purposeful life. We who have looked forward all our lives to making the country a better place to live in must be concerned to ensure that a speedy solution is found to this disquieting problem. I hope that the Minister, who is my Member of Parliament, will urge the Government to do just that.

Mr. Geoffrey Rippon: I join those who have expressed satisfaction with the fact that we hold this debate with you in the Chair, Mr. Deputy Speaker. It is fitting that you should preside over us after all that you have done for the North of England.
It is always a pleasure to follow the right hon. Member for Middlesbrough (Mr. Bottomley). We all share the


anxieties that he has expressed about the excessively high unemployment in the Northern region. In due course I shall follow him and make some observations on the subject of public investment, which is necessary in the region in a more effective way than perhaps we have seen recently. The right hon. Gentleman and I at one time collaborated to some good purpose to try to bring new investment to the North-East at a time of difficulty.
With your wide experience in these matters, Mr. Deputy Speaker, you will know that Governments do not retreat; they simply advance in another direction. If I can speak today with greater optimism than I could at the same time last year, it is because the Government have changed course significantly, especially since last year's Budget. I hope that it will give some comfort to my hon. Friend the Minister of State and his colleagues that I no more suspect the Government, as I did then of motorway madness—blinding along the monetarist lane, regardless of the state of the road. The new doctrine of detour, as announced earlier this month by my right hon. Friend the Secretary of State for Industry, illustrates—and I welcome it—an increasing willingness to make changes of direction as circumstances require.
As my hon. Friend has said, the goal remains the same. The beating of inflation and the restoration of sound money must remain the priorities. But the route, as I see it, will be more circumspect in the future. It is a pleasure to see that my old friend and colleague the Secretary of State has once again taken off his hair shirt and is more suitably arrayed in his coat of many colours. That is reflected in the rather gentle and, if I may say so, effective speech that the Minister of State made today.
As my hon. Friend said, the problems of any region can only properly be considered in the wider national and, indeed, international context. The most substantial cause for cautious optimism is the reduction in minimum lending rate from a horrifying 17 per cent. to 12 per cent. Although it is still too high, at least it is now below that prevailing among many of our industrial competitors. Moreover, it is no longer linked to a totally unreliable measurement of money supply, namely, sterling M3.
What has undoubtedly happened—and this has greatly affected the North, like other regions—is that high interest rates have fuelled the money supply and firms have been driven to borrow more and more just to pay the interest, never mind the principal. Even where bankruptcies have been avoided, profitability and thus investment have seriously declined. Meanwhile, the cost of servicing the public debt has added to public expenditure, which has also been burdened by the enormous and wasteful cost of subsidising unemployment instead of being, as I would wish, more usefully deployed.
It is quite possible to be a monetarist and yet be concerned about the level of interest rates. I think that most hon. Members would agree that the right hon. Member for Down, South (Mr. Powell) is normally regarded as a monetarist. The House may recall an important speech that he made to the Bangor junior chamber of commerce, which was reported in The Times on 31 May 1976. In it he said that a bank rate, or minimum lending rate, of 10 per cent. or 11 per cent. was a monstrosity. He added that
no economy can prosper—it is a miracle if it survives—when money for investment or building is charged at 15 per cent. or more".
He offered, if he were to become Chancellor, to pour a cornucopia of benefit upon the British people with a bank

rate of 3 per cent. That might be a little difficult to achieve rapidly in the present circumstances. But it is important to remember that there was a time when we talked of cheap and dear money, when 3 per cent. was cheap, 5 per cent was dear and 8 per cent. was a crisis. The right hon. Gentleman was right to warn also against the international game of beggar-my-neighbour in competitive increases in interest rates, which he described as
pure lunacy. It is unnecessary. It is futile; and it is harmful.
I hope, therefore—because in the end this is the only way that the Northern region and the rest of the country will benefit—that the Government will use all their influence to get the world's bankers and finance Ministers to come together to stop the interest rate war, which is perhaps as threatening to the prosperity of industrialised countries as protectionism was in the 1930s and may, indeed, lead to the very protectionism which would be so damaging again.
I entirely agree with my hon. Friend the Minister of State that as inflation and interest rates have fallen—and I hope, as I know that he does, that they will soon fall again—the situation of the Northern region is, at any rate for the time being, showing some signs of improvement. My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) suggested in the debate on youth unemployment on 7 April that there were now
more factories opening than closing in our region."—[Official Report,  7 April 1981; Vol. 2, c. 831.]
As he pointed out, the figures produced recently by English Industrial Estates suggest that there is a considerable new interest in trading estates in the region. My hon. Friend the Minister's words this afternoon confirmed that.
No less encouraging is the evidence to be found in this month's issue of the Northern Executive, which reflects growing signs of market confidence in the strength and experience of Northern engineering companies. It points out, for example that Clark Hawthorn Ltd., the diesel engine division of British Shipbuilders in the North-East, reports 15 new contracts, including what it calls several "firsts", placed since the formation of the company in April 1979. Opposition Members in particular will have read with interest the comments of Dr. Gordon Adam, the Labour Member for Northumbria in the European Parliament, who wrote in the same issue that
the North-East is now poised to become a leader in the drive for energy efficiency just as it was once the leader in the energy revolution, because of its dominant position in the coal trade.
Those are encouraging signs, but I think that we would all agree that much more remains to be done.
The problem of high unemployment is not new in the Northern region, as the hon. Member for Durham (Mr. Hughes) made clear. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) also made this clear in the debate on youth unemployment, when he said:
Over the past six years, male unemployment has doubled, while among women there has been a fourfold increase."—[Official Report, 7 April 1981; Vol. 2, c. 834.]
It is right to emphasise that this is a continuing problem.
The Opposition are right to be humble about unemployment in the North-East, because by and large since the war the record of Conservative Governments has been rather better than their own. Between 1951 and 1964, in the period of Conservative Government that has been called 13 wasted years but upon which we now look back as a golden era, unemployment in the Northern region averaged 2·7 per cent. Between 1964 and 1970, under a


Labour Government, it rose steadily to 4·8 per cent. Between 1970 and 1974, the Conservative Government pulled it back, albeit rather slowly, to 4·5 per cent., but sharp progress was also made in the creation of more jobs and opportunities outside the old basic industries, particularly in the service industries. Total employment in the region, therefore, rose.
In the five years of Labour Government between 1974 and 1979, unemployment in the Northern region rose to 9 per cent. of the working population. Worse still, youth unemployment began to rise faster than any other form of unemployment, so that by the end of the Labour Government's period of office it was eight times what it had been when the Conservative Government left office in 1974. Indeed, in 1978 Newcastle city council stated that one in five of the under-twenties in Newcastle who had left school were without jobs. This indicated that, if one really dug deep, the figures were worse than they were in the 1930s. Therefore, as the hon. Member for Newcastle upon Tyne, West and others have fairly said, this is a continuing problem in the North. I think that it must be accepted that the Government inherited a difficult situation.
I believe that the economic health of any region is dependent upon the state of the national economy as a whole. At the same time, regional policy has an essential part to play. It is necessary to stimulate long-term growth in the less prosperous areas by increasing their economic attraction and improving their amenities.
I am one of those who agree that tax concessions and other subsidies are not the real answer. That has been proved by the record over the years. New industries—and this has clearly emerged from this debate—must want to come to the North because it possesses the necessary infrastructure of roads, communications, housing, and so on. That is why I have always believed that the Government should use their power as the major client of the construction industries in particular, but also of a number of other important industries, to stimulate selective public expenditure on investment, particularly at a time of economic recession.
I said when I was the Minister responsible for industrial and regional policy—and it remains my firm conviction:
For regional policy to be successful industrialists must want to invest in development areas. Many of the development areas, again like my own, have great natural attraction and many of the towns and cities lie close to scenery of outstanding beauty. It seems to us that the basic aim of regional policy must be to concentrate resources not on indiscriminate assistance but on providing the services and creating the conditions needed for new industrial growth, and that rural as well as urban."—[Official Report, 9 July 1970; Vol. 803, c. 877.]
It is at this point that I say that it is necessary to press for a strengthening of Government policy in this regard.
There is another aspect of policy to be considered. It should be noted that over the years the Northern region has benefited considerably from the European Community's regional fund grants. Since 1975, the North has received £113 million, and we should welcome the fact that on 13 March the European Community announced that a further £58 million would go towards infrastructure investment programmes in the North. The North has also benefited from loans at lower rates of interest from the European Investment Bank and grants from the European social

fund. In my constituency, the cost of the Kielder project to the taxpayer has been considerably reduced by the aid which has been received from the European Community.

Mr. W. E. Garrett: Will the right hon. and learned Member tell the House how much the taxpayers in the North-East contributed to the Eurofund?

Mr. Rippon: I am sure that the hon. Gentleman will be pleased to know that, although we contributed 20 per cent., we got back 27 per cent. The percentage may be a little lower this year because Greece comes in, and, although we do not rank very high in the Community league tables, we are still somewhat richer than Greece. So we must be grateful for that.
Instead of always criticising the European Community, some Opposition Members, including the hon. Gentleman, would do better to concentrate on ensuring that these funds are maintained and, indeed, increased and made to work more effectively. It would help if they would at least recognise that that is an important contribution. Successive Governments, I am afraid, have been reluctant to regard this aid as additional to the national regional aid, as I believe it ought to be considered. Nevertheless, local authorities are rightly very keen to get some of this regional aid because it enables them to finance important projects with a grant instead of a loan and so to avoid not only interest payments but payments back of principal.
I shall not cover the ground which I tried to cover in the Budget debate, but it is a matter of continuing concern to me, as it must be to many other right hon. and hon. Members, that the cuts in public expenditure have tended to be on capital investment rather than on current consumption. Governments have two weaknesses: first, they tend to be over-statistical, and the statistics they use are always out of date or wrong; secondly, they rely too heavily on whatever happens to be the current economic orthodoxy.
I believe that in evaluating the effects of economic measures more emphasis must be placed on their social and political consequences. This is the point at which the political judgment of the Government must override the economic theories with which they are presented in a narrow and unrealistic context.
It is another failing of economists generally and of those in the Treasury in particular that they refer to capital expenditure in the public sector and in the private sector as if they were referring to two mutually and, indeed, actively competitive zones. Nothing could be more wrong. When private capital is laid out upon capital expansion in industry, it is on the assumption that the public capital investment will go ahead at the same time. Indeed, it is necessary very often that it precedes it, because that public capital expenditure is on the roads, water services and means of public transport without which industry cannot operate. It is equally true to say that the overwhelming bulk of expenditure in the so-called public sector is basic expenditure in the private sector which carries out the work which the Government authorise—and everybody knows that it is the private sector which has been hardest hit.
There are two other factors that influence industry in deciding whether to go to a particular area. The first is the availability of skilled labour. That is why I welcome the Government's emphasis on training and retraining schemes and why I have always said that Ernest Bevin was


right when he said that in difficult times we must not encourage people to solve their problems by moving to another area, because the people who go will be the people with the greatest skills, leaving the region, when the recovery comes, in an even worse state than it was before.
The second problem is the level of rates. The level of local expenditure, and thus the level of rates, in many parts of the Labour-controlled areas of the North is not only discouraging people from coming but beginning to drive firms out of business or out of the area altogether. If I may make a constituency point, one of the reasons why unemployment is not as high in my constituency as it is in some others is that the ratepayers—domestic, commercial and industrial—have the benefit of the very prudent Conservative Northumberland county council.
I do not want to end on a partisan note. We all know full well that most of our national and regional problems can be solved only if we work together to rebuild business confidence. We must create business confidence in the North of England. Confidence has been drained by constant ideological bickering and partisan legislation.
I am very grateful, and I am sure that everyone in the North of England will be, for what the Minister said about the great advantages in the North if we can make good use of them. Undoubtedly; over the years great damage has been done by people suggesting that the North is a sort of disused slag heap. We have a beautiful and productive countryside. I speak with all the more enthusiasm because, like the right hon. Member for Middlesbrough and many others in the Chamber today, I am a comer-in. We have a wealth of young talent in the Northern region which is being wasted. We must channel that talent into productive industry and commerce rather than let those young people swell the ranks of the unemployed or under--employed.
Sometimes, when surveying the problems of the Northern area, it is difficult to be optimistic but, as Winston Churchill said in 1941:
Do not let us speak of darker days, let us speak of sterner days.
I do not think that we can escape the fact that there are stern days ahead, and we have a stern task before us. But—and this is better than could be said last year—I believe that there is hope, and that hope is the genesis of self-confidence. It is self-confidence that we need in the North, just as we do throughout the length and breadth of this land today.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. Many hon. Members wish to speak. If they all take 17 or 20 minutes, few others will be able to speak. I ask you, Mr. Deputy Speaker, to appeal for moderation and short speeches.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Perhaps the hon. Gentleman's eloquent words will be more effective than anything that I could say. I am sure that his words were heard in all quarters.

Mr. A. J. Beith: It is a pleasure to follow the right hon. and learned Member for Hexham (Mr. Rippon), who is my neighbour in constituency terms. I agree with much of what he says, and with much of what he has said in the last year or so in criticism of monetarism and the drastic reductions in public capital investment. There is a colossal waste of public money in the North-East, particularly in subsidising

unemployment. We are spending ludicrous amounts of money on unemployment. We are wasting that money, and the lives of people. Some of them are skilled and senior and others are youngsters who should be getting equipped for work. It is an appalling waste.
Some of the waste is the result of the general economic situation and can be traced to general economic policies. the exchange rates have hit our exporting industries hard, and they subsidise the imports with which those industries compete on the home market. The high interest rates have crippled small businesses in particular. Such businesses should be expanding. Once a 7 per cent. bank rate was thought to be a national disaster. Businesses today have to cope with very high interest rates, even after the recent reductions.
High nationalised industry prices cause serious problems to many industries. During the debates on the Budget many hon. Members, including eloquent Government Members, referred to the appalling dangers of the current economic strategy. They believe that, far from achieving the Government's objectives, it will bring about more unemployment and greater inflation in about a year's time.
I shall concentrate my remarks on a number of recommendations for action in several spheres which I believe will be helpful to the North and to that part of the region that I represent. We welcome new industries in our constituencies. I do not altogether agree with the hon. Member for Durham (Mr. Hughes), who appeared not to welcome American and other outside investors who are playing a major part in the North-East. Among the new industries in my constituency are firms such as Sterling Winthrop, which is American-owned but which is investing substantially in that area. Polychrome, another American-owned company, has expanded in Berwick. We welcome such firms.
However, we are not helped by the present policies on regional aid and development areas. The Government are not concentrating aid where it is most needed. They do not appear to apply logic when setting the boundaries.
Alnwick and Amble in my constituency have a 13 per cent. unemployment rate which conceals an even higher figure in Amble. I cannot understand why they have been demoted to intermediate area status when some of the most prosperous outer suburbs of Newcastle, such as Ponteland, are treated as special development areas. The right hon. and learned Member for Hexham also mentioned the illogicality of the arrangement. Some of the most prosperous areas in the region are eligible for the highest levels of aid, but others with the most serious problems are given the very limited intermediate status at the most. The present policy affects eligibility for the various forms of European aid. The Government are cutting us off from the aid that we should receive.
In addition to looking after new industries we should safeguard the existing industries on which the North is based. Two of the traditional industries in the rural North are agriculture and fishing. We have other opportunities to debate them in detail, but they are tremendously important to the region's economy, and we must look after them. It is not only the problem of the common fisheries policy, but successive Government measures that are making the people employed in the fishing industry believe that they have no future. If that industry goes, employment opportunities right down the coast of North-East England will be lost.
We must also look to the future of the engineering industry, which has suffered greatly from present Government policies.
The coal industry has a far greater future in the North-East than the Government recognise. Off the coast of my constituency there are many opportunities for future development if the National Coal Board is allowed to invest in such development. We need a commitment to re-investment in the coal-fired power stations of the North-East, allied to the development of district heating. I cannot understand the CEGB's enthusiasm for looking all over the countryside for sites on which to establish nuclear power stations when it has existing sites in which it can invest to provide coal-fired power stations and district heating. That would reduce the colossal energy waste. We should be moving in that direction rather than investing in nuclear power stations at Druridge Bay, for example. We must make effective use of our coal resources.
The important quarrying and extractive industries of the North-East depend upon the state of the construction industry. The construction industry in its various forms in the North-East is in an appalling condition. Various bodies associated with that industry have banded together in the northern group of eight to express their deep concern about the effect of the economic situation on all the industries, trades and professions allied to the construction industry.
There is scope for public capital investment of a selective and useful kind in housing rehabilitation, for example. That would directly help the construction industry. Much energy could be saved by a housing insulation policy. That would also provide work for the construction industry. Many other public works are needed. The whole of the Northern England sewerage system needs urgent investment. Investment is also needed in railways and telecommunications. Without such investment the area will suffer, because areas with better communications will benefit. The expansion of business has been frustrated by the lack of investment in telecommunications and the railways. Many businesses suffer as a result of delays in telephome installation and difficulties with the telecommunications network.
We must also have a sensible public buying policy. Examples of foolish buying by Government Departments keep coming to light. There is a fear, for example, that Marconi, in the North-East, will suffer by the choice of specifications that favour a Dutch concern rather than Marconi for investment by the Ministry of Defence.
The Government must scrap the imposition on the life and commerce of the North-East of the 20p increase in the tax on petrol and diesel fuel. That will have a damaging impact throughout the North-East, particularly in the rural areas. Petrol and diesel prices are already higher in rural Northumberland than in the rest of the country. Diesel prices are higher in Britain than in most of Europe. That has a serious impact on attempts to provide employment, to expand business and to get people to work. When people in my constituency take into account the cost of getting to work and the tax taken from them, they find that in few of the jobs available can they earn more than unemployment benefit. That is ludicrous.
We must do something about fuel costs to industry. That was a missed challenge in the Budget. We must

enable industries such as engineering and aluminium smelting to remain competitive in a hostile international environment.
The future of the Development Commission should be safeguarded. It has played an important part in establishing factories in the rural areas. Through the Council for Small Industries in Rural Areas it has also helped small businesses. I can understand the enthusiasm that was expressed by the right hon. Member for Huyton (Sir H. Wilson) the other day to expand COSIRA and do something similar in urban areas. However, I am anxious that COSIRA's expertise should not be diluted and taken away from the rural areas and that if a parallel service is provided in the urban areas it is not at the expense of the rural areas. We cannot afford to lose the small, almost skeleton, team that is providing this aid to small businesses in rural areas in order to provide an alternative in the urban areas.

Mr. John Home Robertson: Is the hon. Gentleman aware that the Scottish Development Agency provides such an excellent service in rural areas as well as urban areas? Perhaps the Northern region could benefit from a similar type of development organisaion.

Mr. Beith: I am aware of that. I said that to the Labour Government on many occasions but they seemed rather slow to respond to the possibility. Although some hon. Members may tonight advance the case for a Northern Development Agency, I am concentrating on the need to make the government modify some of their policies in order to mitigate some of the impact that they are having on the North-East. I hope that more immediate results will emerge from this debate than the longer-term objectives which I share with other hon. Members.
I do not want to leave my point about the Development Commission without paying tribute to the work that it has done. I hope that its ability to remain independent of the shifts and changes of overall Government policy will continue. That body has been in existence since the days of Lloyd George, who established it. Its commitment to rural areas has survived all sorts of nuances of Government policy. I hope that it will continue to work for rural areas, many of which are in the North.
Education is also of great importance to the future economy of the North-East. The Northern region has a lower rate of youngsters staying on at school after the age of 16 than any other region in the country. Only 18·8 per cent. do so, compared with nearly twice as many in London. All sorts of reasons have contributed to that, particularly the pressure to get a job in order to contribute to the family income. However, the Government have now added a new incentive for youngsters not to stay on at school. The new social security benefit regulations effectively say to young people "Either leave school now or miss the chance to get social security benefit until September". The Government are saying this at a time when teachers are urging youngsters to stay on until the summer and take their GCE or CSE examinations. The effect of the new social security regulations is to bribe youngsters to leave school before they obtain examination qualifications that could help them in later life. I plead with the Government to end this ridiculous incentive to youngsters not to obtain qualifications. It is absurd. I can see no logic or sense in it.
Many aspects of national and regional policy merit major changes. In the long-term, the North should be given a greater opportunity to control its own affairs. At present, within the Civil Service structure, it is worrying to see power drifting away from the North to places such as Leeds. The Newcastle offices of Government Departments are being made subservient to offices in Leeds. That is no way to get decisions taken in the North by people who are constantly in communication with the local authorities and the organisations in the North.
That is a great mistake. The Government ought to reverse their policy and move towards a system under which the North can take more charge of its own affairs. As well as making those changes in major overall policy for which more and more people in Parliament, business and industry are pleading, the Government should act on some of the specific recommendations to which I have referred.

Sir William Elliott: I should like to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith) on many of his points, including what he said about education, but if I do so it will take more than the 17½ minutes to which the hon. Member for Workington (Mr. Campbell-Savours) suggested we should restrict our speeches.
I should like to comment on the exclusion from development area status of places such as Amble and Alnwick. We must be flexible. I hope that we shall not return to the situation in 1964, when the Labour Government spread aid too widely, because if that occurs it ceases to be aid at all. That was the discovery that we made in the years after 1964. It is necessary to concentrate aid, first, where it is most needed, and, secondly, where it will do most good. Therefore, we must be flexible. I appreciate the problems associated with the places mentioned by the hon. Member for Berwick-upon-Tweed, and I hope that in due course they will be included in aid proposals.
The hon. Member for Durham (Mr. Hughes) set a sensible tone to the debate. Like the hon. Member for Berwick-upon-Tweed, I did not agree with all his comments, particularly his comments about firms from abroad making the North a satellite region. However, I agree that the problem is deep-seated. Like the hon. Gentleman, I was born in the area and have loved it all my life. The problem of unemployment is both deep-seated and long-standing.
As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, there was a period in the late 1950s when the North enjoyed virtually full employment, as the term was defined by the late Hugh Gaitskell. That is almost unbelievable now, but in fairness it must be said that the storm clouds were gathering even then. Conferences were being held in Newcastle upon Tyne, called by the then Lord Mayor, to face the inevitable consequences of the rapid contraction in the shipbuilding, coal and steel industries. Over 15 years those three industries have lost 170,000 jobs. It take an enormous number of small units to make up that number of jobs. Nevertheless, it is estimated that during that same period the region has attracted about 127,000 new places.
I am encouraged that so far we have not heard much about a development agency or Minister for the North. In the past it has been suggested that that would solve all our

problems. I have great respect for past Ministers who have had responsibility for the North, including the right hon. Member for Houghton-le-Spring (Mr. Urwin), but to suggest that the creation of an additional layer of bureaucracy would solve our problems is to give false optimism and hope to the region. I do not believe that it would. We must build on that which exists.

Mr. Dormand: We are not saying that.

Sir William Elliott: It has been said enough times in the past. At present the region enjoys regular visits from Ministers, and I know that the Government are fully aware of our problems. So were the Labour Government. During the time of the Labour Government, I once calculated that the Northern region enjoyed visits from Ministers at the rate of two-and-a-half a week. We have almost achieved that rate now.
I agree with the hon. Member for Durham that we have been too slow in encouraging new industries to come into the region. We have hung on for too long to our old, established industry and tried to make it work. If anyone were to suggest that unemployment has risen sharply in the last two years I should disagree, because it has always existed. It was hidden unemployment, because the industry of the North was heavily overmanned.
We are now preparing for an upturn in the economy, with industry that is leaner, harder, and more able to meet foreign competition. They were the problems faced by British industry towards the end of the Labour Government's period of office. Our main industry had become uncompetitive, and if we do not realise that now it bodes ill for the future. For too long we have tried to create an industrial pattern based on the old coalfields.
We should be wary of suggesting massive public works ventures or further subsidised employment of any sort. We want real employment, real jobs; work that is being done and manufacturing that is being undertaken to produce goods that are required.
I am very anxious that the Government should stick to their main strategy of reducing inflation. Any more public works engendered simply to create employment, and the subsidisation of further temporary employment, will inevitably mean more borrowing, or more taxation, in order to provide the subsidisation. Either of these things will mean higher interest rates. Higher interest rates are the problem in the Northern region, for they deter the new employers who are so badly needed in our region. Hon. Members on both sides of the House are working throughout the region to try to find the right answers to our problems.
I should like to say a word about education in general. Let us build on that which is good. As the hon. Member for Durham opened the debate, it might be a good moment to mention the two excellent universities that we have in the Northern region. There used to be only one, the University of Durham. Charles Grey, the hon. Gentleman's predecessor, who had a considerable reputation in the House and was greatly respected, took part with me in getting the necessary legislation to part the then King's college from Durham university. Now we have two splendid universities in the Northern region. The expertise and the professional and management skills to which those universities have contributed will help our industrial revival, not only in the Northern region, but all over the country.
I remind the House that the Finniston report suggested that there should be a four-year engineering course. I hope that as a consequence in May, when certain decisions are made, Her Majesty's Government and others will recognise the enormous importance of our universities to the future of our region. I also include the Newcastle polytechnic, which is playing a substantial part in providing essential skills for the further development of the North-East.
I recall the days when, in our debates in the House on the Northern region, mention was often made of the possibility of having a university of technology on Teesside. We did not get it, but we have the Newcastle polytechnic. I visited it recently, and just before that I attended its awards ceremony. We should do all that we can jointly to persuade those who are responsible to maintain our universities and our polytechnic at least at their present strength.
During last week's debate on the youth opportunities programme I sought to encourage those young people who have not yet known what it is to be employed. I happily do so again, and here I should like to develop a point made by the hon. Member for Berwick-upon-Tweed. There is a problem in encouraging the brightest children to remain at school. Children who remain at school are subsidised indirectly, in that the parents still receive some benefit.
This is a matter that is worrying headmasters, as two of them in the city of Newcastle have told me. Those who stay on at school to seek extra qualifications see their fellows obtaining unemployment benefit, and that is very disturbing to them. I sought recently to bring this problem to the notice of my right hon. and learned Friend the Secretary of State for Education and Science, and he assured me that the position was being watched very carefully.
Training for those who leave school is available to a greater extent than ever before. The youth opportunities programme has been extremely successful in the Northern region, and it augers well for the future. It is now possible for a school leaver to have a 13-weeks short training course. This can be linked to 26 weeks with an employer for work experience, and there can then be a further six weeks of training. In the North-East of England we have a better trained young work force than we have ever had in my experience, and it augers well for the upturn in the economy and the effect that it will have on our region.
There is much about the Northern region that is still worrying, but there are encouraging features. The hon. Member for Durham used the term "satellite region". There is nothing satellite about the industries of the North-East. Some of them have recently gained substantial orders. There is nothing satellite about the £8 million order for Drax B, which was won by R. P. Automation, Gateshead. In the Team Valley, Abrahams and Company has just won an export order for £1 million. These are excellent pieces of news, and they are far from being the only ones. We should not over-emphasise the gloomy aspect, because there is so much happening at the moment that is good.
The particular problem of Consett worries us all. It is no small thing when an entire steelworks is closed and no fewer than 3,500 people are made redundant. But I am sure that we all welcome English Industrial Estates' letting of the first large unit. We welcome Paul and Loughram

(Gas Equipment) Ltd., which will occupy a 10,000 ft. factory in Consett. Four smaller units are already let, and negotiations for a further five are almost complete. There is interest in 19 additional factories. This is good news. This is progress. We have a long way to go, but it is encouraging.
I pay due credit also to the combined effort that is being made in the Northern region. I have long advocated it in debates of this sort. A number of conferences are being organised. Some of them will be of the greatest benefit to the region. I welcome the fact that the conjoint committee, as it calls itself, is producing a conference in the North-East in June which will bring together the CBI, the British Institute of Management the Tyne and Wear Chamber of Commerce, the Northern Institute of Directors and several bodies which in the past have worked too much apart. They are now seeking to work together. I welcome also the Industrial Trades Fair conference, which is being held in South Tyneside, for a second time.
I recently attended a meeting in our ancient guildhall in Newcastle of the merchant adventurers. The "Coaly Tyne", as we used to call it, used to be a scene of great activity, and the port of Tyne was a busy one. Sadly, in recent years, the port of Tyne has not been so busy. I am very pleased to read, therefore, of the possibility of the National Coal Board exporting a great deal more coal from the Tyne than has been exported for many years. I am pleased in this context to read of the proposed development of Jarrow Staithes. I am pleased to note that the hon. Member for Jarrow (Mr. Dixon) is in his place. I hope that the Port of Tyne authority will continue to improve its facilities. It is good to know of the second roll-on roll-off berth at Whitehill Point.
My message in the debate is one of optimism. A great deal is happening that is good. We have a great distance to go. The central problem, that of overcoming inflation, is still very much with us, but I can say with more confidence than ever before that the Northern region is ready and able to do that which it has always wished to do, namely, to take part in the economic revival of this country.

Mr. Frederick Willey: I shall respond to the appeals that have been to be brief and will confine my remarks to the subject of my constituency, Sunderland. Unlike the right hon. and learned Member for Hexham (Mr. Rippon), I shall use figures that have no political connotations.
In Sunderland, in 1965 3·7 per cent. were unemployed. In 1975 the figure had risen to 8·7 per cent. In 1980 12·2 per cent. were unemployed. That figure has now risen to 17·4 per cent. The position for men is far worse. In the past 12 years I doubt whether fewer than 10 per cent. of our men have been unemployed in any one month. At present, 21 to 22 per cent. of our men are unemployed. The number is rapidly increasing. The latest figures show that in the last month we lost 862 jobs. Soon one in four of our menfolk will be unemployed.
The Minister of State and the right hon. and learned Member for Hexham spoke about a possible improvement and recovery. I hope that they are right. However, from experience we know that any recovery will be shallow and will last only a limited time. In any event, we have to recognise that Sunderland is a large industrial town with permanent heavy unemployment.
Recently we discussed youth unemployment. In Sunderland, 1,344 young people are unemployed. Wellover 2,000 young people are on the youth opportunities programme. Despite what the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, we are losing fewer than we expected from our schools at Easter. However, a good 4,000 will leave school in the summer. Atpresent, there are about30 vacancies for the young unemployed. The youth opportunities programme was a temporary measure, but it has become irrelavent to Sunderland. Consequently, in addition to heavy unemployment, there is a sense of hopelessness among our young people.
When we turn away from statistics and look at the town, what do we find? Let me take, first, shipbuilding. We have been told that we should encourage technological industries. However, the Japanese happen to be doing very well at shipbuilding. We have probably got the two best yards in Europe, but we have lost a lot of jobs and we are worried about the future of shipbuilding. We have completely lost our ship repair industry. The port is a shadow of its former self.
Thanks to Comings, we have a glass industry, but it employs far fewer people than it used to. We have completely lost the rope and paper industries. Of the new factories, many years ago Thornes collapsed. The large Plessey factory has been lost. In addition, we have lost textile and clothing factories.
In Sunderland we are back to the 1930s. Some parts of the town are worse off than others. I have two wards with heavy unemployment. In Southwick more than 40 per cent. are unemployed. Of the population, 60 per cent. receive welfare payments. One in four households have had their gas disconnected. Over 90 per cent. of children leave school without any qualifications. The young people who are lucky enough to find jobs, get dead end ones.
I am not referring to an inner city area. Southwick was once a village, but was brought into the town just before the war. The community is enterprising. It has a very good neighbourhood project. Unfortunately, the Tories complained about it and the Government withdrew the grant. Fortunately, the borough council continued it. Later this year I shall lead the carnival. It will be held in good spirit. That reminds me of Brixton, because the situation is not dissimilar. The ravage is unmemployment. The position is intolerable and unacceptable.
We are always told that we should be more dependent on our abilities and that we should prove ourselves by being more effective. However, we have two remarkable bodies in Sunderland, namely, the liaison industrial committee and the war-for-work executive. They are complementary. The executive was set up on the initiative of the Sunderland Echo. No town in the country could have greater support from its local newspaper. These are all-party bodies. They contain Members of Parliament, members of the borough council, trade unionists, members of the CBI, as well as people from Sunderland polytechnic and Durham university. We have dealt with a host of matters. We have tried to identify the training needs of industries. We have dealt with industrial courses on microelectronics; we have provided for innovation and development. We have done all that we can for small businesses. We have promoted exhibitions. What more can we do?

Mr. T. W. Urwin: Perhaps my right hon. Friend will mention the job desk set up by the

Sunderland Echo in conjunction with the war-for-work campaign, which has succeeded in providing about 150 jobs in an industrial desert.

Mr. Willey: I am obliged to my right hon. Friend. That point could be expanded. I defy anyone to find something that we have not thought about and tried. However, we are volunteers and have no executive powers. We have raised with the Government the issue of trainees and of a skillcentre, but we have not got far. Although we are pulling together and doing what we can, it is a heartbreaking experience.
About one in four of the menfolk are unemployed. That is expensive and unproductive. What can we do? First, we should recognise our failure. Regional policy has been a complete failure. Since I became a Member of Parliament I have argued that the rate of unemployment in Sunderland has continued to be twice the national average. The pattern of aid is not new. It was introduced before the war. There were then distressed areas. Now there are special areas receiving loans and grants. The Government built factories and have continued to do so. There is alleviation of our difficulties, but there is no success. Such measures did not succeed before the war. It was the war that brought an end to unemployment. We should recognise that.
I pay tribute to the concept of an enterprise zone. I do not like it much, but at least someone is thinking about different approaches. We must be more serious about the development agency, but the appointment of a Minister for the North-East is much more important. Lord Hailsham did a good job, and his report was beneficial to the North-East.
I can only repeat what I have said a score of times about Sunderland. The Government need to take the initiative and set up a commissioner charged with the responsibility of dealing with Sunderland's problems and putting people to work in the factories that we have built. We cannot afford to leave factories idle.
Our own experience is that there is much greater scope for providing the work than people recognise. We always pay tribute to the small businesses, but we need a definable, recognisable and responsible person backed by funds to put people into work.

Mr. Neville Trotter: We are discussing the ongoing history of 3 million people in our region. It is a history with a great deal of success behind it. It is natural that in hard times of world recession great problems are presented by areas such as Sunderland which are foremost in our minds in this debate. The underlying problem has been with us for a long time. The North-East was built up initially on heavy engineering, steel and coal and inevitably it suffers traumatic change as world conditions change.
However, it is not only the North-East of Britain that suffers in this way. Similar regions in all the industrialised countries of Western Europe have the same problems. We must remember that the problems are not just ours.
We have achieved a great deal. I do not accept that the regional policy has not succeeded. The figures that the right hon. Member for Sunderland, North (Mr. Willey) quoted show how much remains to be done. It would have been much worse if nothing had been done. In the North-East we have had to run to stand still. We lost about 200,000 jobs during the 1960s and 1970s in the old


industries. Most of those jobs were recreated in new industries and a tremendous effort went into obtaining those new jobs. It was an extremely successful effort, but it has not been sufficient to cope with the present recession.
It is a worry to all of us that nearly a quarter of the jobs in the North-East are still dependent on the old heavy industries. That proportion must be about twice as great as it is in the rest of the United Kingdom.
One cannot get away from the world picture by looking only at one part of the country. The world picture shows terrifying competiton from developing countries such as those in the Far East. It was almost a Geordie delegation that went out to those parts last summer. Three of the four hon. Members were from Tyneside. We saw people working hard for 60 or 70 hours for £40 to £45 a week. Not only did those industries have the advantage of incredibly cheap labour at a low rate per hour, but they often had the advantage of modern plant. When we visited the shipyards and steel factories in those countries we saw the most modern plant manned by people working very long hours at low rates of pay. That is formidable competition for us in the North-East and for all Western industry. We cannot escape the fact that our future in the North-East and in the Western world depends on keeping ahead of them in technological progress. The productivity in our factories is the key to prosperity in the future.
We have one great advantage in the North-East. We have perhaps been too tempted to refer to our disadvantages and have not given sufficient attention to our advantages. The one factor above all else that comes to my mind is our good industrial relations. They are exceptionally good and a tremendous asset to the area. I was encouraged when recently I read an article by the head of the TUC in the North-East. He spoke about the need to deliver goods on time, to produce goods of high quality and for people to be skilful, efficient and reliable and to produce price competitive goods. I pay tribute to that gentleman and have a high regard for him. He is a man of sense and example, and the trade union movement in the North-East takes its image from him.
On the other side we have sensible employers at the head of many of our industrial firms. The effort made by those working in and managing firms in the North-East is one of the most important factors in securing our future.
The denial of the suggestion that free market forces are being allowed to decide the future of the North-East has already been well dealt with by my hon. Friends. It is worth while to mention that 80 per cent. of the region is assisted. That is the highest percentage of any region in the United Kingdom. However, a matter that I hope my hon. Friend will deal with when he replies concerns the delay in the payment of regional development grant. I cannot see the common sense of saying that a grant may be given for capital expenditure but that it will be delayed. Surely the aim is to inspire confidence so that people will invest in new plant and by so doing will create immediate employment and greater productivity for the future.
A delay of about four months was imposed in 1979 in the payment of grants. I speak not just as an hon. Member but as an accountant. It is correct that there should be an audit of those grants. If there were not an audit, some would take advantage of the system. It is inevitable that it will probably take three to four months for that checking

to take place. On top of that inevitable delay, a further delay of four months has been imposed. I find that hard to justify. I hope that my hon. Friend will explain why that continues. We are considering a one-off exercise, because it is only in the year in which the delays are removed that there will be additional cost. After that, the cost would be no greater.
I am conscious of the enormous amout of effort put in to attracting firms to the North-East by the organisations concerned. However, there is, in my view, a need for more co-ordination of the effort. We always hear arguments in favour of development agencies. The Government of the day always explain why we cannot have one. Like all hon. Members from the North-East, I have given a great deal of thought to the subject. We do not need an agency to carry out the same tasks as are the aim of the agencies for Wales and Scotland. The first of their tasks is to provide finance for Welsh or Scottish industry. There will always be people who want to start with nothing and find it difficult to raise the initial money. I am sure that that applies just as much in Wales and Scotland as it does in our part of the country. But most people do not find a lack of finance the factor that prevents them from expanding in the North-East. Finance is available from various sources and we cannot base the need for an agency on finance.
The second role of the agencies in Wales and Scotland is to build factories. That task is well carried out for us now by the English Industrial Estates Corporation and by the local councils. We are fortunate in that the corporation started on Tyneside. As has been said already, the corporation is stronger in the North-East than in any other part of the country. Factories are readily available and therefore we do not need an agency to construct factories.
The third task in Wales and Scotland is to clear land dereliction. That has been energetically undertaken, perhaps rather late in the day, in the North-East already. Enormous progress has been made as all of us who live there know.
There is, however, a need for a better co-ordination of the existing effort. We need a body that does not have the political connotations that sometimes attach to bodies already active in the North-East. For the purpose of attracting industry, it needs to be a body that is above politics.
I am pleased to say that from what I hear there is at this time effective co-ordination, mostly behind the scenes, in the pursuit of the Datsun factory. The good case for the North-East is being put harmoniously, quietly and sensibly. I am sure that much will be made of the good labour relations in the area, the supply of skilled labour and the fact that workers in the area are used to shift working. Certainly if Datsun comes to the North East it will be made welcome and will find a supply of excellent labour.
We suffer from the fact that there is no proper regional industrial framework in this country. We differ in that respect from some other leading industrial countries, including Germany, which have a system in the regions that is based more on the federal or State organisation.
The hon. Member for Durham (Mr. Hughes) made some scathing comments about foreign firms that come to the North-East. That was unfortunate. I agreed with much that the hon. Gentleman said in his speech, but I do not


accept that point. In the North-East we have about 200 foreign firms from 16 countries and they have been welcome and have provided many thousands of jobs.
Last summer I visited Denmark as the guest of a Danish company and saw industries in that country. My hosts have a factory in the Blyth constituency and I was pleased to hear them speak of their high regard for Geordies, who were described as good workers, able and effective, comparing favourably with labour in Denmark. That is the sort of comment which I like to hear when I travel overseas. It made up for the bad image of British Leyland. The harm done by British Leyland in the past few years has had a widespread effect and has extended well beyond the motor industry and has damaged the general image of British industry. One hears comments from individuals who have been dissatisfied customers and from those who read the adverse press comments. Fortunately these have not been so frequent recently.
I welcome the foreign firms in the North-East because of the employment they bring. I do not think that we have suffered from their headquarters being in Minneapolis, Eindhoven and other such places. I am more concerned that we do not have enough United Kingdom firms with headquarters in the North-East. Here I agree with the hon. Member for Durham. It is an unfortunate feature of our industrial scene in the region.
We have NEI-Parsons, which has just announced good results and has a healthy order book, and the headquarters of British Shipbuilders, which faces great problems in the future, but we do not have the headquarters of enough substantial firms. The hon. Member for Durham made a fair point when he said that firms that do not have their headquarters in our region tend to cut back on the furthest flung branches, and although I do not believe that there is animosity to the North-East, it makes sense to those firms to concentrate nearer to their head offices. I should be happier if we could attract headquarters and not just branch offices.
Perhaps the best way of ensuring that we have the headquarters of large firms in the North-East is to encourage the growth of existing firms. That leads on to the encouragement of small firms, because great oaks start with little acorns. There is a formidable list of people in the North-East who are helping smaller firms. My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) mentioned the excellent universities and polytechnics in the North-East. The Durham university business school is wholeheartedly supporting smaller businesses, as is the small business unit of Newcastle polytechnic. In addition, help is given by Enterprise North, citizens advice bureaux, industrial development offices, council planners and industrial development departments.

Mr. Cowans: I join the hon. Gentleman in praising the university and the polytechnic, but is he not aware that public expenditure cuts are detracting from their ability to do work that he suggests they are doing?

Mr. Trotter: It is a question whether money is being spent to the best advantage. I do not accept that we can exclude universities from the general restraints on public spending which are necessary if we are not to have higher inflation or higher taxes, both of which are harmful to industry.

Dr. Keith Hampson: Is my hon. Friend aware that the research and development budget for universities has remained constant in real terms and has not been cut?

Mr. Trotter: I am grateful to my hon. Friend. I was about to say that the allocation of funds within universities has not been cut pan passu throughout. The most worthy projects have been protected
In North Shields, in my constituency, the Rev. Alan Spivey of the United Reform Church was so concerned about the need to provide employment at this time of high unemployment that he set up a group in his Church with a view to trying to create work for the unemployed. He has been helped by a number of bodies, including the local council, the co-operative development group and the Action Resource Centre, which is another excellent outfit which is seconding people to give small firms the advantage of their experierce. There is a long list of groups and individuals who are helping small firms in the North-East.
The number of applications for that assistance is showing a welcome expansion. A year ago there were about 240 inquiries a month and there were more than 1,000 in a recent month. There are signs that small businesses are beginning to blossom. However, there is I believe, a need for the education system to encourage the thinking that is necessary to create the initiative that starts small businesses. That does not come through in our education system, and the country suffers in consequence.
The image of the North-East is an important factor. All of us in the area were outraged when the head of Inmos decried the North-East and said that it was not the sort of area that would attract the skilled scientists and managers that he needed. We say that he is the loser by not coming to an area with so many attractive features, but there is a problem, to which my hon. Friend the Minister of State referred, in the distortion of the image of the North-East. It is the task of all of us from the area constantly to proclaim its advantages and to remember that if we refer to the snags out words can be distorted and used against the region.
The advantages in the North-East are numerous. We have an excellent infrastructure. Indeed, it must be one of the best areas in Western Europe for transport facilities. Our road system is excellent, the high-speed trains that bring many of us to the House on Mondays are first-class, the air services are excellent, and I pay a particular tribute to those who are responsible for running the ports in the North-East. The Tyne, which faced traumatic changes as a result of the drop in the coal exporting trade, saved itself by its own efforts and the Tees is one of the best ports in the country. We have excellent industrial relations, based on the friendly attitude of our Northern people, and we have beautiful countryside.
I should like to end on an optimistic note. There is good news in the North-East, including the orders for NEI-Parsons and the comment in The Journal in Newcastle today that the North-East CBI sees a glimpse of light at the end of the tunnel of recession. There are some excellent comments in the annual report of Alcan showing how the huge smelter at Tynemouth has triumphed over adversity and had a successful year in 1980. British Shipbuilders is selling ships to Hong Kong and China, a most difficult area in which to compete.
I see no need for a mood of defeatism in the North-East. Let us not be hostile to our friends who live in the South. Let us not adopt an "us and them" attitude. Let us work together with colleagues in the South.
No longer do we in the North have the supplies of raw materials on which our prosperity was founded. However, we retain the skill acquired over the centuries. We must, and shall, match that skill with the will to succeed by our own efforts.

Mr. James Tinn: I shall try to take less time than did the hon. Member for Tynemouth (Mr. Trotter), though it is tempting to match the length of his speech. Hon. Members have an opportunity to discuss the Northern region only when the Opposition are prepared to provide a Supply day. We then find the debate dominated in terms of time by the speeches of the few Conservative Members that the North sends to this place. I may be accused of adopting a parochial approach, but I wish to refer to my own area.
The problems of the area are general to the region as a whole, with one important exception. Teesside is heavily dependent upon basic industries—iron and steel, the industry in which I formerly worked, and ICI chemicals at Billingham and ICI plastics at Wilton. Over one-third of the work force in Teesside works in one or other of those industries, against a national average of 4 per cent. The lack of diversification that is common throughout the region makes it vulnerable to a recession. I am proud, therefore, that Teesside has achieved high standards in productivity, competitiveness and industrial relations. I can support each of those claims.
In productivity, steel at Redcar is already a success story despite the fact that this large modern plant is still under-utilised because of lack of demand. Such plants, if they are to achieve peak performance, require to be fully loaded. However, there is a good story to tell, including achievements in industrial relations, as Mr. MacGregor commented on Teesside recently.
In competitiveness, ICI will match the world except when hampered and undermined by gas and oil pricing policies in the United States, which amounts to unfair competition. I welcome the fact that the present United States Administration appear to be starting to deal with the problems. I hope that the Government will support the European Commisssion in the pressure that it is exerting on Washington for a further easement of the effective subsidies given to the United States petrochemical products industry.
In industrial relations, I mention not only the steel industry and ICI but Teesport. This is now the third largest port in the country and is likely, in time, almost inevitably, to become the largest. Part of its success is due to excellent labour relations and the sensible, practical working agreements reached between management and unions, which must be the envy of older declining ports.
Despite restructuring, which has been especially savage in the steel industry, we face job losses without any alternative employment. The figures as they affect Teesside are appalling. Our problem is sometimes hidden by tremendous capital investment, which is assumed to have brought jobs. The difference between Teesside and most of the North is that ours was the first part of the

country, even before the recession, to begin to suffer technological unemployment. Massive investment in ICI and steel has been counter-productive in terms of jobs. ICI is still shedding labour. In the Teesside area, including Hartlepool, 20,000 jobs in steel have been lost since 1968.
In my home town of Consett, the loss of 3,500 jobs is catastrophic. The town is dependent upon steel. The loss of 20,000 jobs on Teesside means 20,000 homes threatened and damaged. I wish to support strongly the case put to Ministers by Langbaurgh council for an extension of special development area status to Teesside. The unemployment figures unquestionably support the claim. The existence of areas with special development area status, although with only marginally higher unemployment, so close to Teesside effectively denies the possibility of attracting many developments. Who will come to Teesside when it lacks the advantages that are obtainable a little further north or along the river? Special development area status is an urgent requirement.
The council has also asked the Government to abolish the additionality rule. I accept that this rule has been operated by a Labour Government as well as by the Conservative Government. Under the rule, funds received from the European Community for development in the region are offset by reductions in funds made available by the United Kingdom Government, thus effectively denying any net benefit.
I believe that I have been successful in my promise to speak briefly. I should, however, like to acquaint the House with the views of a constituent who has asked me to forward her comments to the Prime Minister. Her remarks are deeply moving. The lady has brought up a family of seven, two of whom are still at home, one unemployed and the other at school. Her husband has been unemployed for just over a year. His wage-related benefits have run out. She was working in a Social Services department, but after going into hospital towards the end of last year she has been unable to pick up her employment again.
The family has been receiving supplementary benefit. The husband travels hundreds of miles looking for work. He is willing to go to Saudi Arabia, as so many people in the North have been obliged to do. He attended interviews for jobs at Butlins only to find that he was one of hundreds of applicants and had no prospect of a job. The lady informs me that 65 per cent. of the family income goes on heating and lighting, leaving £19. She feels that the boy still at school and his father are suffering the most. The boy has no decent clothes in which to go to school and has poor shoes. This is all too terrible. I shall certainly pass on to the Prime Minister the letter that the lady enclosed for her. I hope that the right hon. Lady will find the time to read it, and perhaps even her heart will be moved.

Mr. George Grant: I welcome this opportunity to debate the economic and social problems of the Northern region. The region has the worst unemployment in the whole of the United Kingdom, except for Northern Ireland. I shall be brief, and concentrate on two or three matters that affect my constituency.
The Minister talked about the special measures that were introduced by the Government in 1979. Like Berwick-upon-Tweed, Morpeth and Blyth lost their special development area status and were reduced to


development area status. At that time, unemployment was 10 per cent. Today male unemployment in those three areas is running at 14 per cent. Unemployment is such in Morpeth that any benefits in the adjoining contituencies of Berwick-upon-Tweed and Blyth will benefit my consstituency, too.
As my hon. Friend the Member for Durham (Mr. Hughes) said in opening this debate, the problems in the North-East are deep-seated. If we are to understand the problems we must consider how the situation has developed and changed. Thirty years ago, in the Northumberland coalfield there were 59 collieries and 50,000 miners. In Ashington colliery alone there were 5,000 workmen, and in the Ashington federation there were 15,000 workers. Ashington was the biggest colliery town in the world.
Today in Northumberland there are only seven pits. At Ashington colliery there are only 1,000 men. Last week one colliery closed down. Ashington is a town that was built on coal, and unless new developments are brought in its future will extend for only a matter of months, not years. During the recess, I shall go down the pit at Ashington to see for myself what is happening. I hope that money will be made available to develop the seam to keep the people of Ashington in employment. At the moment, unemployment stands at 14 per cent. in the area.
Adjoining Ashington colliery there is one of the finest colliery complexes in the world—the Ellington-Lynn complex, which produces 3 million tonnes of coal a year. I mention that because collieries have been closed all along the Northumberland coast. The villages that are left have no employment to replace coal mining. Those villages include Widdington, Broomhill, Hadstone, Chevington and Amble. About 50 per cent. of the population are affected by redundancy, early retirement, social security provisions, as well as unemployment.
The Ellington-Lynn complex works six miles out under the North Sea. Recent borings have shown that there is a bonanza of coal off the Amble coast. In the High Main seam, there are 15 million tonnes of coal. The seam section between 36 in and 60 in—the Low Main—has 30 million tonnes. The Brass Thill, at 26–120 in, has 90 million tonnes. The three-quarter seam, the Victoria and the Marshall Green give a total of 250 tonnes.
I appreciate the difficulties that face the National Coal Board. But there are 39 million tonnes of coal in the ground. New capacity is where the cream is. However, in the national economic interest some geographical consideration should be given to providing new capacity. The position in our three constituencies is such that this coalfield must be developed because of the high unemployment in the area and the need there for new power stations. At Blyth, we have Blyth A and B—coal-powered stations. The station was started in 1959, and when it opened it was expected to last for 25 years. It is still going. Now the Central Electricity Generating Board proposes to build a nuclear power station at Druridge Bay. However, the local people object to that proposal. That resistance, since the Three Mile Island incident, has turned into anger and fear. Moreover, the nuclear power station is to be sited on a popular beauty spot and there is a population of 200,000 people within a radius of 10 miles of Druridge Bay.

Mr. Kenneth Lewis: I thank the hon. Gentleman for giving way. It has been suggested

that there should be a coalfield in the Vale of Belvoir, but I am not aware that the miners or the National Coal Board are worried about its being a local beauty spot.

Mr. Grant: I shall not go into that matter. I have been used to pit heaps all my life, but what is more important to me is full bellies.
The building of the proposed power station is against the wishes of the local authorities. The Minister told those of us who represent constituencies in the North-East that we should tell people outside about the good aspects of the area to attract industrialist, management, executives and their families to come to the area. But I put this question to him: What industrialist, manager, or executive would want to move to an area where industry is so badly needed and where there is the shadow of a nuclear power station?
The coal is there in Northumberland. There is an existing site, and the land is available. The land was bought for the C station at the same time as it was bought for the A and B stations. I ask the Government to do two things. Let them forget about the nuclear power station. It is a waste of money to proceed further. Let them tell the CEGB that we want a coal-fired power station, and get on with the development at Amble to provide the much needed employment on the North-East coast.

Mr. Bernard Conlon: My hon. Friend has expressed most clearly his sincere views about the nuclear power station. However, he must recognise that the nuclear industry provides thousands of jobs in the North-East. If the policy that he is advocating tonight were accepted, those jobs would be lost for ever.

Mr. Grant: I hope that my hon. Friend has followed my reasoning. I am not against nuclear power for the sake of being against it. I am posing the question: is it right to have a nuclear power station within a 10-mile radius—bearing in mind Three Mile Island—of such a heavily populated area?
What I am proposing is a coal-fired power station. The power plant industry will get the benefits of a coal-powered plant in the same as it would from a nuclear plant. There is social capital tied up in the Druridge Bay area in houses, roads, schools and communities, but there are few jobs. We need to attract new industry. A nuclear power station there would dissuade everyone from wanting to go there.
The construction industry has been going downhill in the Northern region for five years. The Royal Institute of British Architects conducted a survey recently. The work that architects have on the table for the fourth quarter of 1980 is down by 27 per cent as compared with that of he fourth quarter of 1979. With the slide that has been taking place in recent years and is continuing, unless something is done the construction industry in the Northern region will go out altogether.
I ask the Government to consider the matters that I have mentioned: the construction of the power station, and the go-ahead for the National Coal Board to develop, for geographical reasons, a coalfield which may not be attractive but which, for the reasons that I have given, should be considered.
The recent improvements in redundancy pay, early retirement and transfers are good things for men who have given a lifetime to the industry. However, I hope that the


Government do not think that this is the answer to pit closures. What helps pit closures to be more bearable is the development of new capacity.
The time has come to stimulate the economy. The £15 billion that is being used to pay unemployed people should be used to revitalise British industry. The trouble with the Budget was that it took money out of people's pockets so that they had less money with which to purchase things. This can only mean fewer jobs. This morning I spoke on the telephone to the employment exchange manager in my constituency. I asked him for certain figures and asked what news he had of future job prospects. He said that he had done a survey of every firm in the travel-to-work area and that he had had no response. No firm had said that it was expanding or expecting an increase in jobs. That is the picture in my constituency.
I ask the Government to consider seriously the matters that I have raised.

Dr. Keith Hampson: The debate has shown that there is a great sense of responsibility and concern on all sides. If Conservative Members keep coming back to the matter of inflation, that is not because we believe that unemployment is a lesser evil—it is not. We are saying that unless we can lower inflation it will be impossible to lower the levels of unemployment. Looking at the 1960s and 1970s, one realises that there is a relationship between mounting inflation levels and mounting unemployment.
In the North-East, to a fair extent our success is determined by the success of the economic strategy for the country as a whole. Central to that is the process of reducing interest rates so that we can ensure that however fragile, slow or delayed the upturn is, companies can be successful and make something out of that upturn. They are slimmer and have fewer manning problems. There is a greater sense of realism in industry from the point of view of both management and trade union practices, and so on. With de-stocking coming to an end, and with the savings ratio changing, I believe that that upturn will occur.
The hon. Member for Redcar (Mr. Tinn) showed very vividly the tremendous investment in his constituency. He mentioned the iron ore terminal, steel, Imperial Chemical Industries, and so on. With the motorway programmes that we have had in the North-East we have virtually unrivalled transportation facilities compared with anywhere in Europe. We have the metro link in Newcastle and all the tremendous investment that has gone into the North-East,
It is virtually 20 yeas since my right hon. and noble Friend the Lord Chancellor, Lord Hailsham, was Minister with responsibility for the North-East, yet still the basic problems exist. It is still a declining region in terms of employment. Not to make too much of a partisan point, whatever the approach, and whoever the Government, the problem has existed. I have just checked some figures. Under the last Labour Government, Teesside saw an increase in unemployment of 98 per cent. Poor Hartlepool, always a black spot, saw almost a 120 per cent. increase in unemployment between 1974 and 1979. Therefore, the problem is always there, whoever be the Government and whatever the approach. Why? Because of the over-reliance on major traditional heavy industries. It is clear that those industries will continue to run down, and that

is where the nub of the difficulty rests. Obviously, despite what the hon. Member for Durham (Mr. Hughes) said, we must pursue a regional policy that draws in companies from abroad. Surely it is fundamental to bring in new investment from wherever possible. As so much of it lies in Germany, America and Japan, that is where we must search for it.
There is another statistic. In addition to having new major oprations as well as the traditional ones, we must, as many hon. Members have said, have more of a small industry base. We need a better mixture so that we are not over-dependent upon any one sector.
I think that the North-East has a lower proportion of total income coming from self-employment than one finds in any other part of the United Kingdom. How can we stimulate and develop that? Clearly the Budget offered a great deal in terms of new start-up schemes, but it was a disappointment in a number of ways to business men in the Northern region. For example, it did not help those major industries that are heavy consumers of energy. The region is a very high energy consumer. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, the Budget did not meet the needs of those small companies with potential and which are eligible for grants but have had them delayed by four months. They are often phased grants, with each phase being delayed by four months. My hon. Friend the Minister has such an example that I put to him, of a company whose managing director lives in my constituency.
It is important that whatever we do to encourage new companies to appear, it is the companies that already exist and have potential for growth that are helped so that they are successful when the upswing comes and so can mop up some of the dreadful unemployment.
I should prefer to have seen a better psychology in the Budget. An extra percentage point off interest rates was the key thing. If we could have reduced interest rates by another percentage point, the whole climate would have been so much better for business.
Specifically, we must look at our grant system to see whether we can refine and improve it. It comes back to the crux of what a small company needs in order to get bigger. It needs money for investment. Money is extremely expensive today. So first let us deal with interest rates. But we also have a grant policy. It provides ready money. Many of the high pockets of unemployment—not just in the North-East—are omitted from the regional aid system. We must assess whether we can use the money that is available in a slightly different way.
It might be better to be more generous with the grant but gear it more to specific black-spots areas and to impose a time scale—for example, a proviso that the special grant for such areas will last for only a year or 18 months. That will bring forward potential expansion and development that otherwise will not come in the crucial period that we shall run into at the end of this year and next year. It is important to bring forward as much investment and development as possible so that we do not hit the ghastly total of 3 million unemployed throughout the nation and the acute level that we would suffer in the North-East.
Instead of taxing the banks, I should have preferred the banks to operate a scheme to provide cheaper interest rates for companies that are in the special areas that I have mentioned, to make it possible for them to launch programmes that create new jobs.

Mr. Cowans: I accept the argument on behalf of small firms, but does the hon. Gentleman accept that at a stroke the region is losing large firms with 1,500 employees? Even if we had hundreds of small firms with about 10 employees there would still be a net loss to the region.

Dr. Hampson: I have accepted that. I have said that we shall not find a solution to the problem of mass unemployment by small company start-up schemes. First and foremost, we must have a lowering of interest rates to help all companies. In addition, we must have special help to enable potential investment to be brought forward; something that will boost the confidence of the business man in a smallish or medium-sized company that could expand. We must not concentrate only on the man with two employees who could have four or five employees. There are many medium-sized companies that could take on new work and expand, but they are hesitant about doing so largely because of the cost of money and concern about potential markets if the necessary investment is undertaken.
The other striking statistic in the North-East is related to the dependence on basic traditional industries. The region is greatly dependent upon craft jobs. It is an appalling statistic for the nation that over the past seven years it has lost 600,000 semi-skilled or limited-skilled jobs. Bearing in mind the pace of technology throughout the world, this presents a major problem for the Northern region, which has a disproportionate number of craft and limited-skill jobs. Britain has tended to downgrade the importance of training and vocational preparation for young people covering the end of their time at school to their first few years in employment.
If we are to keep abreast of technology and developments in other countries we must examine their systems. It is a competition not only between companies and products but between education and training systems. In this country we have not had a clear framework for providing key skills in growth areas and for handling the considerable problem presented by young people in their final years of school and the period that immediately follows when they are in the job market.
In Britain, 44 per cent. of young people leaving school go into jobs where there is virtually no systematic further education and training. In Germany only 7 per cent. of those leaving school receive no education or training, and in France the figure is 19 per cent. That highlights the problem. I urge my right hon. and hon. Friends in the Department of Industry to get cracking and to implement the Finniston report. What has happened to thatreport?
Of course, that is only part of the problem. The Department also has a vital role in ensuring that the Department of Employment, which, as the sponsoring Department, handles the training boards, achieves the right structure. There must be some sectoral support for industry. For example, someone must cover the problems of the car industry or the steel industry. But, in addition, there must be a localised system. We must examine closely how we can reshape the special programme boards of the MSC so that the problems of the locality and the region may be met by the provision that is available, whether it is in local education authorities, careers services, or the MSC joining with employers and trade unions.
There must be a combination of a certain amount of sector-ITB support, together with a new regional or local

structure. We do not need a glib catch-all solution, such as a Northern Development Corporation. We must identify the problem and set up the systems that will cope with it. There is nothing in the development corporation idea that leads me to suggest that we would be able to cope with any of the problems any better than we are—whether it be in terms of national investment in the infrastructure, or what we are already getting from Europe, or in any other of the key areas that can be identified but for which we do not have the necessary approach or systems.
Of course, we in the North must help ourselves. I agree that we have done a great deal. I do not begrudge any of the efforts that have been made over many years by everyone in the North-East. However, sometimes we do not help ourselves. Some of the councils do not help much at times. There is Langbaurgh, with its excessive manpower levels, and Newcastle, with its massive commercial and industrial rates. In Newcastle, I understand that there is a rate poundage of almost 230p—far ahead of almost anywhere else. Hence of course, the importance of the enterprise zone on Tyneside.

Mr. Robert C. Brown: rose—

Dr. Hampson: I promised to be brief. I am sure that the hon. Gentleman will be able to advance his argument in his speech.
High rate levels have a depressing effect on jobs. Companies in the enterprise zone will be freed from the rate burden. I hope that we shall be able to stimulate a new growth area that is free from that burden.
Our polytechnics are good. However, the way in which they have been handled by some local authorities, such as Teesside, means that they are not as good as they might be. The polytechnics are a major national resource as well as a regional one. We cannot afford to have these institutions at the mercy, or at the whim, of the political and financial pressures of local authorities. It does not follow that the institution is better able to meet the needs of a locality because it is owned by the local authority. Robert Gordon college in Scotland meets the requirements of the local community and the oil industry even though it is funded by the Government in the form of the Scottish Office.
It is important that we get the system right. The polytechnics are too important to leave to local authorities. We must ensure that the money that goes to them is directed to technician-level. courses of the type that the nation has lacked over many years. We must ensure that the system of funding prevents resources from going into all the other courses—alreacly well provided in universities and colleges of higher education—which should not be primarily the job of polytechnics.

Mr. Brown: The hon. Gentleman referred to Newcastle's rates. Newcastle is the regional capital and it has more than its share of problems. The hon. Gentleman then referred to education. 'One of the major industries in the North-East has recently given a cheque to one of the universities. If the Government get cracking with the Finniston report, they will be able to use that cheque.

Dr. Hampson: I take the hon. Gentleman's point. As he knows, I have long been concerned about getting the Finniston report moving. The Government's lack of response is disappointing. The fault lies not only with the


Government. The real culprits are the professional institutions and particularly the Council of Engineering Institutions. They are stymieing the Government's efforts. I should like to see the Government putting in the boot and get cracking with a system that has statutory backing.
Although we talk about the problems of the localities and the region, it comes down to the overall economic strategy and its hoped-for success. It comes down to getting the national provision right, whether it is the polytechnics we are talking about, technician training, or grant-aid, or whatever. We should not just be viewing these things as parochial matters, just because we are North-East Members.

Mr. T. W. Urwin: A week ago the Palace of Westminister was quietly but effectively invaded by hundreds of trade unionists from the Northern region, and not for the first time. On this occasion they came to remind us that every day since May 1979 2,500 people in the United Kingdom have become unemployed and have signed the register. They came to tell us of the bitterness, anger and frustration of the people who are now in the dole queue. There is the fear and apprehension of the thousands more who stand on the threshold of redundancy and all that that holds for them. They came to tell us that in 1980 46,500 redundancies were declared in the Northern region alone—double the figure for 1979.
At present, job losses are measured at the rate of 1,000 a week. There are massive job losses in the manufacturing sector of industry in the Northern region. Our seed corn is literally being wasted. The new industries which are coming into the region are not by any means compensating for those losses.
The press and media have focused the attention of thousands of people in the Northern region on the debate today. There are people who understandably expect that someone will be able to wave a magic wand so that new jobs are provided and the dole queues are reduced.
As my right hon. Friend the Member for Sunderland, North (Mr. Willey) said earlier, my local newspaper is running a campaign called the war-for-work campaign. Another newspaper is circulating a questionnaire amongst its readers. I have received many of those during the past few days. The questionnaire asks three questions. The first is:
Do you agree that unemployment is the most serious problem facing Briain?
The second is:
If so, what are you going to do about it?
Those questions could have been sent to the Prime Minister, to the Secretary of State for Industry, and to the Chancellor of the Exchequer, because the third and most important question is:
Would you support a major new programme of public investment to get Britain back to work?
My answer to that question is a resounding "Yes", as other colleagues of mine have said.
I should like to say what my shopping list is. It is more lengthy than that of the hon. Member for Berwick-upon-Tweed (Mr. Beith). I wish to suggest to the Government some of the major contributions which they can make towards reducing the dole queues and getting people back to work, remembering what the Prime Minister said during the last election campaign, that

Labour was not working. By Heaven, Toryism is not working either, to a far greater extent than could have been said about the last Labour Government.
One major contribution that the Government can make is to relax the crippling monetarist policy pursued by them over the past two years. There should be a further reduction in the minimum lending rate in order to increase profits. I believe in profit making, because profit provides the ability to reinvest and invest more than is being done now, as the right hon. and learned Member for Hexham (Mr. Rippon) said.
Other policies have been superimposed on the economic policies. The Government have imposed a stranglehold on local authorities. There should be a restoration of democratic control to the elected members of local authorities. They should have complete autonomy, to which they are entitled.

Mr. Campbell-Savours: My right hon. Friend said that there should be relaxation in the monetary strategy. I do not believe that that would resolve the problem. Is not the problem far greater? The monetary strategy has been relaxed because the Governent are off target. They have overshot that target. The money which we demanded last year has been brought into the economy. The whole strategy of the free market is failing. That issue is far more complex.

Mr. Urwin: I entirely agree with my hon. Friend. Perhaps he will be patient, as I shall come to that point. He may have saved some of my time as well as adding a few minutes to it.
A much better climate for house building should be created. Here again I agree with the right hon. and learned Member for Hexham, who called for additional public expenditure for housing and building, as the Government have always been the biggest customer of the building industry.
At Question Time today we again saw clear indications that the Government's housing policy is based almost exclusively on selling council houses rather than on putting building operatives to work and building new stock in the public and private sector.
I want to see the development of a much stronger and more realistic regional policy, properly co-ordinated. I want to see not only further diversification of the industrial base in the region. Like many others, I want to see other aspects of infra-structural development in broad comprehensive terms embodied in a strong regional policy. I want to see a Northern regional development agency. Every one of us on these Benches has been fighting that battle for a long time. It is not enough to say that we get more money than Scotland or Wales. We do not have the institutional resources that they have. The Sunderland district council made representations to the Minister about establishing a development agency, and his reply was that we should help ourselves. In the North that is done not only by local authorities but also by those elected to them.
My hon. Friends the Members for Easington (Mr. Dormand) and for Durham (Mr. Hughes) have reservations about having a Minister for the North, but no one can belittle Lord Hailsham's tremendous contribution when he had the appointment. I, too, held the position for a short period of seven months and can testify that there is tremendous value for the region in having its own Minister. For instance, it would help with the Nissan project.
I want to see a national economic plan to aid recovery. It is no good pepper-potting here, there and everywhere. We need an objective. I want to see the establishment of a national investment bank using North Sea oil revenues to sponsor industrial and economic development in the region. If necessary, I want to see pension funds with unlimited financial resources harnessed to achieve the objectives. I want to see a strengthened National Enterprise Board—not a fragmented or truncated one, as we have now. We need a stronger NEB, as conceived by the previous Government, at least aspiring to the ideals set for it. It must have adequate funding in order to make a real impact on the Northern industrial scene.
I hope that the Minister has taken note of everything said in the debate. Many of us could have spoken for hours about the region's requirements, but let us hope that the Government will learn the lessons quickly.

Mr. Ian Wrigglesworth: I agree very much with the right hon. Member for Houghton-le-Spring (Mr. Urwin), and I hope to develop some of the points that he made.
Just over a year ago I said that we faced the horrific prospect of having 150,000 people unemployed in the Northern region. We now face the prospect of 200,000, with 188,000 unemployed at present. It was said earlier that we can spend too much time on statistics. No one from the North is unaware of the horrific facts behind the figures. Some time ago I published letters written to me by people in the region outlining their experience of life on the dole—broken marriages, strain within families, children sent to school without proper clothing, the prospect of Christmas with not enough money for presents and all the other humiliations of being unemployed. I think that we are all aware of the real human facts behind the figure of 188,000 unemployed in the Northern region.
I wish to say something about the position on Teesside, following what was said by the hon. Member for Redcar (Mr. Tinn), then deal briefly with some of the national implications, and finally say what we in the region might, and I believe should, do.
First, as the hon. Member for Redcar said, Teesside has something of an image for having many new industries and much capital investment in new industries, and of course that is true. In recent years the area has been the recipient of the highest level of capital investment of any county in the country. But it now also has the highest level of unemployment in the country, barring the Western Isles. I do not think that the level of unemployment is always appreciated, even in the region. In Middlesbrough, the largest part of my constituency, we have reached, and indeed gone beyond, the sad state to which the right hon. Member for Sunderland, North (Mr. Willey) referred, where more than one in four—26 per cent.—of the male work force is unemployed. That is 14,000 people. In the county as a whole, 3,375 young people are unemployed. That is over 150 per cent. higher than the figure in 1978.
The situation in Cleveland is as desperate as in any part of the region or, indeed, of the country. That is why, in recent times, together with others in the Northern region, we have been pressing for the Datsun plant to come to our area, and I am delighted that two of the sites that we suggested are being considered. I very much hope that the plant will come to the Northern region—not just for the jobs, which of course are the main benefit, but because I

believe that it will be an enormous boost to the moral of the region and a vote of confidence in the work force, the industrial relations record and all the attributes of the region that we know so well. Those factors are well know in some parts of the world, but if we had that plant I believe that we could demonstrate what we can offer to international companies of that kind.
I was a little worried when the hon. Member for Durham (Mr. Hughes), in opening the debate, referred to the region as a satellite economy. I believe that we must attract companies from all over the country, and indeed from all over the world, to build their plants in the region.

Mr. Dormand: As reference has twice been made to my hon. Friend the Member for Durham (Mr. Hughes) on the same subject in his temporary absence I should like to clear the matter up. He did not say that we would not welcome foreign investment in the Northern region. His point was that the decision-making took place outside. I think that hon. Members on both sides will agree that there are problems with closures. I wish to clear up that point, because I should not like the impression to be given to the Government that the Northern region does not welcome bona fide foreign investment

Mr. Wrigglesworth: Of course I accept that. I shall come to decision-making towards the end of my remarks.
We must face the fact that the problems of our region, and indeed of others facing great difficulties at this time, will not be solved unless we can break away from some of our past activities, particularly in the political sphere, but also in the economic and social spheres. Ding-dong battles have been waged continually over the years between those who support nationalised industries and those who support private enterprise, each seeing no good in, and continually attacking, the other.
The continuing difficulties that we have had in getting a settled system of pay determination in the country that will give the sort of economic stability that is a precondition of growth in the economic area are becoming increasingly serious. If we are not able to obtain a national consensus on that and on the other factors that have divided the country over the last three decades, we shall not make the sort of progress nationally that is a precondition of our getting the growth and the jobs in our own region.
I want to go into this question of decision-making in the region and to follow up some of the remarks that have been made, particularly on the question of the Northern Development Agency. I think that, as the hon. Member for Durham said, the basis on which our economy was built was the indigenous capital within the economy, the people in the economy—the Peases, and he mentioned the Palmers. I could go through a whole list of names of the people who started the Stockton and Darlington railway, the mining, the engineering and the other industries in the area, which were very largely home-grown industries.
If we want to bring about that sort of thing and ensure the accountability and co-ordination of the bodies that have proliferated in the region over recent years—the Northern National Enterprise Board, the Northern Economic Development Council, the Northern Economic Planning Council that we used to have, the proposed Northern Development Agency, which I strongly supported, the English Industrial Estates Corporation, COSIRA—we must go one step further than people in the region and nationally have been prepared to go so far.
If we are to go down that road, I hope, and my colleagues hope, that we shall go for greater decentralisation from Whitehall, and Westminster and give power to the people in the Northern region; pull it back from Whitehall and have an elected body in the region to give the thrust and provide the creativity and the control in the region over these activities.
I and my colleagues are very strongly in favour of decentralisation and of devolution to Scotland and Wales. I know that some hon. Members on the Opposition Benches are very much opposed to devolution to Scotland and Wales. They should think about devolving power to the Northern region in the same way as to Scotland and Wales. I have always supported devolution to Scotland and Wales. Instead of opposing that it would be better to support it, and at the same time to support devolution of power to the Northern region, to give more democratic control over all the bodies that have proliferated and thereby bring together the creativity, the abilities and the resources that we have within the region, in order to stimulate the industrial, economic and social development that we all want to see.

Mr. Kenneth Lewis: I have sat through the whole of this debate, and I wish to make a contribution for a particular reason. The hon. Member for Durham (Mr. Hughes), who opened for the Government, talked about Jarrow.

Mr. Urwin: On a point of order, Mr. Deputy Speaker. With all due respect to the hon. Gentleman, what interest does he have in the Northern region? This is an Opposition Supply day. The subject for debate was chosen by the Opposition, and it is essentially a Northern region debate. Although the hon. Member was born in the North of England he certainly does not represent a Northern constituency and there are Members here who have been waiting all day to speak in the debate.

Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Member has been here throughout the debate. I hope that he will be very brief indeed.

Mr. Lewis: I hope that my remarks will be helpful to the Northern region. I was in Jarrow in the 1930s. I was chairman of the local Young Conservatives and I saw the Jarrow march. I am concerned about the region. I have a love for it because I was born and brought up there.
The problems of the region are repeated throughout the country. The unemployment problem in the Northern region will be solved when it is solved throughout the country. No Government can survive an election with 3 million unemployed. Some officials in industry and banking and on the fringes of Government predict that unemployment will rise to between 3 million and 3½ million If that happens, I shall fall out with my Government. Nevertheless, I do not believe that the Government are the cause of all the unemployment. Unemployment is caused mainly by the world situation, the price of oil and a number of other factors. However, the Government must at least try to hold back the rising tide. I cannot regard the prospect of its continuing to rise to unacceptable levels in the next 18 months with any enthusiasm. Unemployment must somehow be made to move in the other direction.
The Minister provided an effective catalogue of Government measures already operating to help the North-East and the country as a whole. I was delighted to hear him wax enthusiastically about what the Government have done. He said that he recognised that the market cannot do it all. That was something of a mini U-turn for him. Perhaps that attitude will be reflected throughout the Government. It represents a move towards more action—and the Government have already done a great deal—to try to improve the industrial and economic position of the country and, therefore, of the Northern region.
The Government can use their power, influence and resources in many ways. Countries such as the United States, Germany and France are using Government power to help in the recession. Many Governments of capitalist countries support industry. There is no reason why a Conservative Administration here should make excuses for assisting in the improvment of the country's economic condition or for helping individual industries. That can be done in a number of ways.
First, with the support of the Chancellor of the Exchequer, the Government can use research and development programmes. Secondly, they can use capital investment programmes in the nationalised industries and Government Departments. Some could be on a national level. The Government should also get involved in short-term capital programmes, including some for the Northern region. We must take the country through its difficulties until the world recession ends. There is much to be said for the Government committing themselves to short-term programmes to deal with our present special situation. If there is an upturn in world trade, these capital programmes will not then be required. Industry by itself will be able to employ more people.
The Department of Industry can also assist by using that sleeping quango, the National Enterprise Board, which has been retained but which the Government are hesitant about using. The NEB can do a great deal by using both money and resources to back up our new technological industries. During my grandfather's time, and to a lesser extent my father's time, the North was in the vanguard of the motivating industries behind the British industrial effort. I should like to see the North again lead the field in new technology. I hope that the Government, perhaps through the NEB, will encourage and support companies to go there.
Do not let us apologise for the fact that the NEB should be used. There is no point in retaining it if it is not used. It will have failures as well as successes. Of course, we do not want to spread money around for the sake of it, but the Department of Industry should try to make certain that money is allocated to enterprises that are likely to be successful.
In many ways I am sorry that during the last year or so many good companies have got into difficulty when they should not have done. I refer not only to companies in the North-East but to firms in many other places. The Government and the Department should pay special attention to companies which are marginally in trouble but which with support could stay in business.
My right hon. and learned Friend the Chancellor should recognise that a company which employs people contributes to the Exchequer. The company itself may not pay much tax. Corporation tax is easily avoided. However, those employed by any company pay large sums


of money to the Exchequer. They do not do so when they are on the dole. Therefore, there is a lot of virtue—and value to the national effort—in ensuring that companies in the North-East and elsewhere remain in business if possible, so that when times get better they can expand and employ more people.

Mr. Bernard Conlan: We are drawing to the end of the debate and a number of my hon. Friends still wish to speak. I shall therefore deal with only one problem which affects my constituency. More can be done to assist industry, and I do not think of additional financial support. My thoughts lie in another direction. What I have in mind can best be illustrated by relating the recent experiences of three firms in my constituency.
The first is Osram-GEC, which manufactures lamps of all descriptions. During the middle of last year, because of the flood of imported vehicle lamps from Eastern Europe and the Far East, the Osram market was completely undermined.
I have drawn Ministers' attention to the unfair practices in regard to the importation of the lamps. I have also drawn attention to their inferior quality. At long last, after many months of pressure, the Under-Secretary of State for Transport—a Minister for whom I have the greatest respect—has now decided that he will have consultations with the industry to lay down a code of conduct that will prevent these inferior, low-quality lamps from coming into this country. But if the discussions with the industry are not concluded quickly, there will be no lamp industry in this country to protect, so speed is of the essence.
The second company is a large international company called International Paints. It has developed a product which is revolutionary of its kind. It is a compound for the treatment of ships, to prevent corrosion. It is known as "Intersmooth SPC". The company is selling the compound throughout the world. It is being sold to the Norwegian, Danish and Spanish navies. The American navy is using the product to treat five warships.
For four years I have been trying to persuade and cajole the Royal Navy into using the product. I have been doing all sorts of things, regular and irregular, without much hope of success. The Royal Navy has treated one frigate that has recently been built on Tyneside, and apparently the tests will take two years. In the meantime, the company's prospects of marketing the product overseas are undermined, because it cannot claim that the Royal Navy is using its product. Something should be done about it.
The gravest problem concerns the third company that I want to mention. I left London yesterday to meet on Tyneside the joint shop stewards committee of the Marconi Radar Company. The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the problem earlier today. This company manufactures high-quality radar for both civil and military purposes. It has learnt recently that the Ministry of Defence is about to cancel a contact on which Marconi is currently working and to buy equipment from Holland, of all places.
This is not a precedent; it has happened before. The Civil Aviation Authority, when purchasing equipment for the civil airports, entered into a contract with Marconi. It laid down the specifications. Marconi was working to the specifications laid down by the Civil Aviation Authority, but at the last minute the authority decided that the

specifications were wrong, and that the only place where it could get the radar off the shelf was from the very same firm in Holland.
Bearing in mind that very unhappy experience, on this occasion Marconi, ever mindful that the same thing could happen again with the radar for the Navy, has been developing radar equipment which is equivalent to the Dutch equipment. It is now able to offer to the Royal Navy an equivalent radar system, competing in weight, in efficacy and price with the. Dutch equipment. Therefore, there can be no possible justification for buying the equipment overseas when the criteria laid down for the equipment can be met by a British contractor.
When our foreign competitors see the folly of our actions, they must laugh their heads off. They must be astonished at our incredible stupidity. We are damaging our indigenous industries in buying from overseas. If that continues for much longer, the experienced and skilled teams of both designers and manufacturers will be broken up and will never be restored. That is a serious threat to the industry.
I understand that a decision will be taken in May. Therefore, it is essential that the Government should tell someone in the Department to buy British. Last Thursday, the Prime Minister replied to a question from my hon. and learned Friend the Member for Leicester, West (Mr. Janner) on the subject of Marconi. She said:
We try to buy British wherever possible and make strenous efforts to do so even on some occasions when it costs just a little more."—[Official Report, 9 April 1981; Vol. 2, c. 1111]
We all concur with that. But words are not enough; action is drastically needed.

Mr. D. N. Campbell-Savours: From my constituents' point of view, this debate is a little premature. However, I am grateful to my hon. Friend the Member for Easington (Mr. Dormand), because he pressed for it.
The debate is premature only because last weekend The Sunday Times printed an article which suggested that there would be 1,200 more redundancies in my constituency. If such redundancies should occur in addition to the announcement due about school leavers and the redundancies that have been announced at Condura and other factories in my constituency, unemployment may rise from 14·1 per cent. to nearly 20 per cent. by July. In other words, in the 26 months since the general election—when unemployment accounted for 2,164 people in my constituency—unemployment will have risen to nearly 6,000.
Such redundancies mean that the Workington travel-to-work area has one of the highest unemployment rates in the whole of the United Kingdom. The problems of unemployment further aggravate the special problems that affect young people. I must express gratitide to the Labour Government and to this Government, because they have persisted with the youth opportunities programme. YOP schemes have been of vital importance and have ensured that many young people in West Cumberland have had an opportunity to work.
In my brief contribution I appeal to the Government to think deeply about the possibility of increasing youth opportunities programme allowances. I have carried out research. Letters were sent to 126 district and county authorities in special development and development areas.


Of those who replied, 79 per cent. maintained that the materials allowance available under the youth opportunities programme represented a major impediment to the formation of an adequate special measures programme entailing YOPs. The authorities informed us that another major impediment involved the transport charges made to the places of activity for YOP personnel. In development and special development areas, the Government would do well to consider giving special concessions to young people.
The Parliamentary Private Secretary to the Minister may be aware that the West Cumberland Training Association communicated earlier this week with the Under-Secretary of State for Employment. It drew his attention to a scheme that it was promoting on the basis of traineeships. The traineeships involve setting up modules that incorporate several activities which will be highly beneficial to young people. Those activities will involve general work experience, further education day release and the possibility of training in workshops that have been set up by local authorities and others. They will also involve general preparation for work.
As a step up from the national YOP arrangements, the Government might consider introducing traineeship schemes on a higher rate of grant support from central Government through the Manpower Services Commission. Young people could then be given wider opportunities for industrial and social training.
Last October I sent a letter to the then Minister of State, Department of Industry—Lord Trenchard. I argued the need for a number of new initiatives to be used not only in my travel-to-work area of Workington but in the county of Cumbria as a whole and in a wider area of the Northern region. I asked for additional funds to be made available to the district authorities of Allerdale and Copeland for the formation of an industrial development unit to help us to promote ourselves in the absence of special development area status which was removed by the Government shortly after they took office.
I put a 12-point programme of demands to the Government. Not one of those demands has been satisfactorily responded to. I sought a regional energy pricing strategy. That factor was missing from the NEDO energy report, but it would have meant that in the regions industrial operators could have purchased energy at lower prices than those applicable in other parts of the United Kingdom.
I also sought interest rate subsidies against factored invoices on the basis that a facility should be made available to every company in a development area with a ceiling of interest rate subsidy. That would ensure that the largest companies gained the least and the smallest and start-up operators would gain the most.
I also sought the formation of newly designated development areas—I referred to them as special development localities. They would form areas smaller than the current travel-to-work areas, which are the designated areas for assisted area status. In the special development localities there would be many incentives that are available within special development areas.
I sought a number of other measures including special grants for the conversion of old industrial premises, rate relief for industries in the development aeas, and a selective programme of regional public works. I hope that

as the Secretary of State cannot attend the debate he will reply bycorrespondence to many of the points made by my right hon. and hon. Friends.

Mr. W. E. Garrett: The debate so far has shown a rather cosy attitude about employment prospects among Conservative Members. I share the view that the increase in work which has allegedly taken place in the region is temporary and likely to remain so.
The Minister of State mentioned new orders in shipbuilding and an order book of seven vessels. However, Lloyd's List of Wednesday 1 April shows that at the same time the Japanese had orders for 31 ships—a total tonnage of nearly 2 million. The subsidy from the Japanese Development Bank for those ships is between 65 per cent. and 75 per cent. That is the type of work we must provide in our area if we are to keep the jobs. The money would be much better spent on those jobs than on paying unemployment benefit.
I draw attention to last night's edition of the Newcastle Evening Chronicle. The story "Crime on the Dole" concerned the chief constable of Northumbria's annual report. It said:
Northumbria is now fourth in the national crime 'league'. And Chief Constable Mr. Stanley Bailey links the increase in crime to rising unemployment … 49 per cent. of detected crime was committed by people who were unemployed.
So far, the young unemployed in the Northern region have been docile. It may not have dawned on some of them that they may never work in their lives because of the introduction of robots and new technology. Yet we provide no facilities for conditioning them to that possibility.
It was claimed that high unemployment, the lack of job prospects and bad housing caused the riots in Brixton at the weekend. The same circumstances exist in the North-East, and I warn the Government that they should not be too complacent about the fact that the young unemployed are quiet at the moment.
Some weeks ago, there was a demonstration against unemployment in the Northern region. I have seen better, but it was an indication of the anger, frustration and fear felt by the unemployed. We must do something to help them. I pay tribute to the Newcastle trades council, which has provided a centre for the unemployed. The council depends on funds from local authorities and voluntary subscriptions from trade unionists and other sources. It has been claimed that the activists at the centre are militants, and they are not necessarily members of the Labour Party, but they are trying to help the unemployed to lead useful lives. If Government money can be made available to help, it will be most welcome.

Mr. Robert C. Brown: Because of lack of time I shall be brief and shall refer only to the plight of the construction industry. I have repeatedly warned the Government over the past 18 months that, following the completion of major schemes such as the Tyneside metro, Kielder water and the Tyneside sewerage scheme, unless further major schemes are brought forward rapidly, the construction industry in the Northern region will be all but destroyed. There is no other way of describing it.
If Ministers tend to get bored with Labour Members referring to the construction industry time after time they


ought to take note of the Northern "Group of Eight". Two construction industry trade unions—UCATT and the TGWU—are involved, but the other organisations are the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors, the Institution of Civil Engineers, the National Federation of Building Trades Employers, the Building Materials Producers and the Federation of Civil Engineering Contractors.
No one on the Government side will suggest that they are lunatic "Lefties". I remember many members of those organisations displaying posters in their cars during the election campaign urging "No to Building Nationalisation". Today, the group states:
There is no evidence in reports reaching the Northern 'Group of Eight' representing the Construction Industry in the Northern Region, to support recent statements by Government Ministers heralding an upturn in the economy … The overall picture is of a potentially dynamic industry, which has always been ready and able to provide the nation's buildings and essential infrastructure, wasting away through under-deployment.
There is much more that I should like to have said, but I shall conclude with a quotation from the Official Report of 7 May 1940. At that time, the country was on the brink of disaster. The words were those used by Cromwell to the Long Parliament when he thought that it was no longer fit to conduct the affairs of the nation:
You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go."—[Official Report, 7 May 1940; Vol. 360, c. 1150.]

Mr. Harry Cowans: I shall be brief. If there were as many vacancies in the North-East as exist at this moment on the Conservative Benches, we would not need this debate. I hope that the Minister will not rely on the old argument that the situation is not the fault of the Government but is due to lack of action by the Labour Government. Since our debate on 20 January 1980, 50,000 jobs have gone down the river.
New concerns that have come to the North-East, whether or not they are foreign investors, are welcome. There is, however, a major problem. Not more than 10 years ago, Vickers, at Scotswood Road, one of the most bustling areas one was ever likely to see, was employing 20,000 people. Now it is lucky if it employs about 3,000. The problem of Bellesinger also has to be taken into account.
The enterprise zone is to be welcomed. One possible problem is that Vickers will shed labour and develop a new plant in the enterprise zone without creating any extra jobs. People may well stay due simply to the creation of the enterprise zone. It is a strange quirk of fate if the zone means only that people move around within it and the number of jobs is reduced.
The structure plan has recently been published. The Secretary of State for the Environment does not inspire confidence when he knocks back any chance of extensions to the Metro. The chance of attracting industry into the area is not helped when the right hon. Gentleman turns down the idea of a land bank for industrial concerns. How can one attract industry if one cannot supply the land? If this had happened nine months hence, the area would have had no chance of attracting the Nissan plant. It should be communicated to the Secretary of State for the Environment that if he adopted a different attitude he might inspire more confidence in the area.

Mr. Don Dixon: I have sat throughout this important debate. It is a pity that hon. Members who spoke at the beginning of the debate did not make the brief contributions that we have heard at the end. If that had happened, all hon. Members present would have had the chance to raise constituency questions. It annoys me that hon. Members should speak for 20 or 30 minutes when others have constituency matters to raise. One could put the world right in 30 minutes if one talked common sense.
It is time that some of the people who shed crocodile tears felt what it is like to be unemployed. It is no good talking about statistics. When one is unemployed, one is 100 per cent. unemployed. There is nothing worse than the humiliation of begging for money rather than receiving the dignity of the pay packet.
The Northern region has been top of the unemployment league for a considerable time. This has happened under Governments of both parties. I am not blaming the present Government. If the idea of regional policy is to have economic parity, the policy has failed in the North-East and the Northern region. To those who believe that expansion is taking place and that the region is attracting industry to replace old industry, I would point out that last year there were 40,000 fewer jobs in the region than in the previous year. I am talking about 40,000 fewer jobs not 40,000 redundancies.
My hon. Friend the Member for Wallsend (Mr. Garrett) said that the North-East has about 26,000 people working in British Shipbuilders, where the present state of orders is a matter of great concern. Could not the Government pass over some naval and MOD orders to shipyards in the area?
The Prime Minister said that people should be mobile. The trouble is that the people who are mobile are the young and active ones. When they go, they leave behind the community centres, hospitals and old people's homes, the parks and the libraries, for which someone has to pay. The right hon. Lady should have a word with the Secretary of State for the Environment about public expenditure cuts. Incidentally, my authority was mentioned in the Black report. Had that report been implemented, it would have been given aid and the Northern region would have had £11 million extra aid.
The last ship repair yard in my constituency—the Mercantile Dry Dock—has been put on a care and maintenance programme. The last pit in my constituency, at Boldon, was on the hit list.
I have little time left, but I want to put one or two constructive points to the Minister. I have sat here all day and I intend to put them to the Minister. Perhaps I can give an idea of the size of the problem of youth unemployment in my area by saying that when the local authority advertised for 22 apprentices it received 654 applications. There were 232 applications for one apprentice electrician. There were 231 applications for the job of clerk-receptionist in one of our community centres—a dead-end job, paying about £2,400 per year.
We are told that we must help ourselves. When we had the Jarrow march in the 1930s we were told by the then President of the Board of Trade that we should go back and work out our own salvation. The Jarrow marchers were not marching for an extra crust of bread or for another bowl of soup. They were marching for the right to work, as is happening now. The Jarrow authority implemented the


Jarrow Corporation Act, which allowed the local authority to aid industry. The Minister should bear that in mind when the local government legislation comes up for review, and, should make sure that provision enabling district authorities to help industry is not taken out of that legislation.
My last point is again a constructive one because we are trying to help ourselves. South Tyneside, my local authority, has just had a successful industrial fair, for the second year running. It was run in co-operation with the English Industrial Estates Corporation and the Department of the Environment—with incidentally, the backing of the local newspaper, the Shields Gazette, the Newcastle Chronicle and Newcastle Journal, the Sunderland Echo, and the South Tyneside Post. Over 7,000 people attended the fair in two-and-a-half days. Its purpose was to enable local business men to display their wares, bring their customers to the exhibition, and to see what was on sale within the area. It was also to give a psychological boost to local business men and the general public and to ensure that there was a wide diversity of business within the area. In the longer term, its purpose was to encourage young people to start their own businesses in the area. That is surely constructive.
The Minister said earlier that he was prepared to help people to help themselves. Let him come to South Tyneside and discuss with the local council the possibility of a permanent exhibition centre in the area. It would require Government aid. The community has the will, the spirit and the land. Let us now see whether the Government will encourage the local authority.
Having listened to the whole debate, I thought that I would make those remarks. I have tried to be constructive. I have put to one side statistics which I could have mentioned. I apologise for having spoken for so long.

Mr. Jack Dormand: The Opposition feel that it is very significant that all of the Conservative Back Bench speakers in the debate referred to the North-East. They had apparently forgotten that this has been a debate about the Northern region—and that includes Cumbria. The Opposition are just as concerned about the problems in Cumbria, which match those of the four North-Eastern counties.
The hon. Member for Rutland and Stamford (Mr. Lewis) has not had the courtesy to wait for the replies, although I know that he has been present for most of the debate. Although we do not question his motives for speaking in this debate, we deplore his contribution to it when some of my hon. Friends have not been able to speak on matters affecting the Northern region. When the problems of his region are being discussed, we might suggest that one or two Labour Members from the Northern region should make contributions to that discussion. I do not want to waste any more time, because the hon. Member wasted plenty of it. We shall test his sincerity by seeing on how many occasions he comes into our Lobby when matters affecting the Northern region are debated in the future.
We welcome the presence of my right hon. Friend the Member for Huyton (Sir H. Wilson). It is a measure of his

continuing concern for the North. We recognise the most valuable work, done during his premiership, by a Labour Government.
I think that my right hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) perhaps misjudged what was said by my hon. Friend the Member for Durham (Mr. Hughes) and myself about there being a Minister responsible for the North. We are not opposed to having a Minister responsible for the North. We are concerned that the present Government, of all Governments, might attempt a bit of camouflage by appointing a Minister for the North without any real powers. If we had a Minister for the North with real power and with a seat in the Cabinet, we should all concur with that. We all pay tribute to what my right hon. Friend the Member for Houghton-le-Spring did when he was Minister responsible for the North.
I am sorry that the Minister of State is not present. We understand the reasons for his absence. I say to the Under-Secretary—I am sure that he will convey it to the Secretary of State—that I found the Minister of State's speech frightening in its complacency. We had a catalogue of what the Government are doing. Everything that the Minister mentioned was done by the previous Government. Since then, the base has been narrowed considerably. The Minister gave a catalogue of the kinds of aid that are being given. What we say—I shall develop this matter—is that it is simply not sufficient. That is the burden of our argument.
For some time I thought that we would be getting some possible support. We got some for a time from the right hon. and learned Member for Hexham (Mr. Rippon), when he talked about interest rates, which affect the North and other parts of the country. His remarks on public expenditure were commented upon by one or two of my hon. Friends. However, the right hon. and learned Gentleman did his own U-turn and said that in general he now supported Government policies, particularly as they affect the region. That is rather different from the kind of speeches we have heard from him in recent months.
The Minister of State said that the Government do not question the need for regional aid. If the Government were true to themselves, Ministers present today would have told the House that market forces will solve the problems of the Northern region. The Secretary of State for Industry went a very small distance down that road when announcing substantial changes in regional policy in 1979. But the whole country knows that matters have deteriorated since then.
I do not intend to give too many statistics this evening. However, a little over a year ago, when the new regional policies were just beginning to take effect, there were 117,000 people without jobs in the Northern region—an unemployment rate of 8½ per cent. The most recently published monthly figures show 186,000 unemployed, representing a rate of 13·6 per cent. of the work force. That is a rate which is exceeded only in Northern Ireland. It is getting worse literally daily, as my hon. Friends have pointed out. If areas such as the North are to survive, it is essential that the Government of the day not only operate a strong and vigorous interventionist policy but recognise that it is a fundamental part of their policy. That is perhaps expecting too much of this Government. It is evident that they are unaware of the bewilderment, despair and anger felt by our people in the North.
The Secretary of State's philosophy was perhaps best expressed in his speech on regional policy on 24 July 1979, when he said:
There has to be self-help in the assisted areas. There has to be enterprise, competitiveness, high-productivity and a reputation for co-operation between management and the work force in the assisted areas if they are to reach the level of employment that we all want them to reach."—[Official Report, 24 July 1979, Vol 971, c. 373.]
We all say hallelujah to that. However, I challenge the Under-Secretary of State to say which of those aspects of self-help are not present in abundance in the region. We have had some excellent examples from my hon. Friend the Member for Redcar (Mr. Tinn), not least concerning the excellent industrial relations that exist in our region.
The burden of the Government's case in introducing new regional policies in 1979 was that resources would be concentrated where they would be most needed. We are entitled to know why unemployment in the Northern region has increased by no less than 80 per cent. since the institution of those policies. The Government know that £9 million a week is being spent on unemployment benefit in the region. The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned the illogicalities of assisted area status in his constituency. My hon. Friend the Member for Morpeth (Mr. Grant) said exactly the same. My hon. Friend the Member for Workington (Mr. Campbell-Savours) gave some interesting examples of assisted area status in his constituency.
I hope that the Government will press the region's case with the EEC. How much of the refund due to the United Kingdom from the EEC budget will be spent on public spending projects in the region? [HON. MEMBERS: "Nothing".] It is about three months since I asked the Under-Secretary of State about that aid. I understand that no statement has been made. Will he give the assurance that the case for the North, specifically for the Northern region, is being urged by the Government with the EEC?
My hon. Friends and I are sometimes accused of being merely destructive when dealing with the region's problems. We do not accept that. Heaven knows, there is much to be destructive about with this Government. I shall turn to a number of suggestions. I merely add to those that have been made by many of my hon. Friends in their fine speeches. These are suggestions which the Government will be able to implement with the minimum of trouble if they have the will to do so, and which will be of considerable benefit to the North. I make no apology for saying again that we should like to see the establishment of a Northern development agency.
We have had a travesty of the truth from the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) and from other Conservative Members who have given the impression that we think that a Northern development agency would produce miracles and provide all the jobs that we want. They suggest that we think that there would be no further problems if it were established. We never said that and we do not say it now.

Sir William Elliott: Has that been the suggestion?

Mr. Dormand: Yes, it has. The hon. Member for Newcastle upon Tyne, North said exactly that in his speech. He will be able to check it in Hansard.
We do not regard the Secretary of State's recent refusal as the last word on the matter. One of the arguments used by the Government is that other regions would also demand such an agency if the North were granted one. Our

response to that argument is that other areas do not have the strength of our case. The Northern region has topped the unemployment league for the whole of its history. No other area has had the industrial structure of the North and its subsequent decay, and no other area is so vulnerable to the competition of the Scottish Development Agency and the Welsh Development agency.
That argument can be developed more closely by considering the parallel case of the National Enterprise Boards. There are two regional boards—those of the Northern region and the North-West region. Those boards were instituted because of the special needs of those areas. In spite of their emasculation by the Government, the Secretary of State maintains them in existence, so presumably he feels that they have an important role to play. However, has there been a queue of other regions demanding regional NEBs? I understand that no other area has expressed the wish to have one.
Therefore, a co-ordinated attack on job finding to prevent the dissipation of present efforts by a multiplicity of bodies, coupled with adequate resources, would go at least some way towards meeting the disastrous decline of employment in the Northern region. If the Government refuse to accept our view on that matter, perhaps they will consult the Northern CBI, which has expressed continuing support for a Northern development agency.

Sir William Elliott: Will the hon. Gentleman give way?

Mr. Dormand: I shall not give way to the hon. Gentleman.
The second proposal concerns the three new towns in the region. The Government have decreed that the development corporations concerned should be wound up at the end of 1985. The Government's misjudgment in that matter epitomises the misjudgments and misconceptions about the Northern region as a whole. The three new towns are the most successful job-finding agencies in the area and the need for them will continue long after 1985. The announcement of the termination in that year is already causing expert and dedicated staffs to leave the corporations. The new towns' recruitment of jobs to theirareas has gone against regional and national trends.
In Peterlee—which I know so well—in my constituency, there has been one extension of the designated area to provide more land for industrial use. The corporation is presently seeking a further extension of 400 acres. That speaks for itself. I know of no local authorities in the areas which are opposed to an extension of the lives of the new towns. I beg the Government to think again on that matter.

Mr. Derek Foster: My hon. Friend will be aware that in the new town of Newton Aycliffe there was a net gain of 4,000 jobs between 1974 and 1979. Newton Aycliffe was an oasis of prosperity, but in 1980 there were 1,275 redundancies. That represented 15 per cent. of the total employment of that town. We need the status of new town to continue well beyond 1985.

Mr. Dormand: I am most grateful for my hon. Friend's constuctive and valuable intervention. My hon. Friend knows what effects that town has on his constituency.
We earnestly request the Government to reconsider there decision not to disperse Civil Service jobs to the


Northern region. The Minister will recall that the last Government proposed to transfer about 4,000 jobs to the North. The present Government almost immediately stopped them on coming to office. We are constantly told that that was done on economic grounds, but it is strange that the Hardman committee, which took two years to consider the matter, did not say that. Nor did the Society of Civil and Public Servants, which is one of the largest Civil Service unions.

Dr. John Cunningham: Nor did any of the Tory candidates in Cumbria during the last general election. They supported dispersal.

Mr. Dormand: I am sure that that intervention will be noted by the Minister.
The Society of Civil and Public Servants said that Government's reasons were
totally fallacious on economic, recruitment and employment grounds.
The findings of the University of Strathclyde, which were well publicised, were that the plans abandoned by the Government would have created an extra 25,000 jobs in the regions and produced long-term savings of well over £800 million, which should appeal to the Government. There is a conflict of evidence, but, with the desperate need for the type of employment that the Civil Service provides, the Government should be flexible and reconsider Civil Service dispersal urgently.
My hon. Friend the Member for Morpeth is knowledgeable about the coal industry, which plays a major role in the Northern region. The miners in the North have a well justified reputation as one of the most reasonable and conscientious work forces in the country. they have helped to produce record tonnages, but, because of their efforts and because of the gloomy market, we have coal stocks of nearly 40 million tonnes, many of them in the Northern region, which is causing concern to miners and their families. The National Coal Board is likely to sell 6 million tonnes less this financial year than last year. Stocking alone will cost £35 million.
The Government can do two things, and they have already started on one. They are encouraging the greater use of coal in industry. It is almost universally recognised that over the next 20 years major industrialised countries will have to shift their energy needs away from oil. In the recent disastrous Budget, the Chancellor said that £50 million would be made available over the next two years to help industry to make the change from oil fired to coal fired boilers. We welcome the principle, but are deeply disappointed at the comparatively trivial sum. If two or three major companies converted to coal, the money would disappear in a few months.
The last thing that we wish to do is to give the impression that the North is a desolate, barren region, lacking excitement, enjoyment, beauty, sport and culture. The exact opposite is true. Most of us who have the honour to represent the area were born there and will not move away. The Government should ask the civil servants who moved to the North some years ago whether they would like to return South. In no circumstances would they go back.
Our people are responsible, proud and hard-working. The managers of the factories established in the North more recently will confirm that unequivocally. However,

we need to have the same opportunities as the remainder of the country. We are reluctant to demand rights, but our history, which is one of hard and dangerous work in heavy industry, cries out for a man's right to work, to live in a decent house, to continue education in accordance with his ability and intelligence and to live in pleasant environment. Much has been done to that end, especially under Labour Governments, but much more remains to be done.
I hope that the Government will seriously consider the splendid contributions made from these Labour Benches tonight. Tory Governments have little support in the North. If the Government ignore the pleas to improve the serious state of the area, they will receive even less in the future.

The Under-Secretary of State for Industry(Mr. John MacGregor): Despite the fierce tones of the hon. Member for Easington (Mr. Dormand), it is a pleasure to follow him in this debate. I know that he has always taken a great interest in his own region and has played a leading part in it. It is a pleasure for me personally, because in a previous and different capacity we worked together, silently perhaps, but in the interests of the House as well as of our own parties, as part of what is euphemistically described as the usual channels. I am therefore delighted to follow him today. From his experience, like my own, as a former Whip, he will know that in the interests of all Members of the House we have to cut short our own remarks to enable others to participate, as I am sure they wish to do. Therefore, it may not be possible for me to respond to all the points that have been made in a very wide-ranging debate. On the specific points that were raised, if I cannot cover them all in my speech, I shall endeavour to reply to them in writing.
I begin by paying tribute to the tone set by the hon. Member for Durham (Mr. Hughes). With a few exceptions towards the end, I think that the tone that he set has made it a constructive and worthwhile debate. I should declare at the outset that I have no strong connection with the region, although in a sense I have two. I was born and brought up in a part of Scotland that shares many of the problems of the Northern region—a coal mining area with all the difficulties of dereliction, declining jobs through declining industries, all the coal seams disappearing, and so on. I remember clearly my own feelings at that time and the way in which my thinking was affected by the original Toothill report, which was produced by the Scottish Council. That document concentrated not only on infrastructure, but on growth centres and played a large part in the thinking of my right hon. and noble Friend now the Lord Chancellor when he produced the original report in 1963, which led to much of the fundamental new infrastructure that has been greatly praised by many hon. Members today, including my hon. Friend the Member for Tynemouth (Mr. Trotter).
I also remember clearly experiences that I had in the Northern region because I used to holiday there every year. I agree with all the comments that have been made about the many attractive parts of the region and, incidentally, the importance of drawing attention to them. Very recently, on almost my first visit as a Minister, I visited Consett and other parts of the Northern region. I was struck by some of the promotional literature, including brochures on the county of Durham, which brought out in


a striking way how attractive is much of the region. As many hon. Members have stressed, I believe that it is important to emphasise that side of the region, rather than the difficult areas, in trying to attract new industry, executives and so on.
Of course I share the deep concern that has been expressed about the levels of unemployment. I must tell the hon. Member for Wallsend (Mr. Garrett) that I am in no sense complacent. The hon. Member for Durham rightly recognised that the problems of the Northern region are of long standing. Indeed, reference has been made to the fact that at some points in the 1950s, the early 1960s and the early 1970s it looked as though some of the problems were really being overcome and that the Northern region was not only sharing, but going ahead of other parts of the country, in the growth that we experienced. He was right to emphasise that point, because it has been since 1975, covering periods in office of two Governments that growth of that region has become lower than of any other region except the West Midlands. It is not a problem that has arisen in the last two years. It is a problem of long standing. If we are to overcome these problems through effctive action over time—and I emphasise those words, because clearly it will not be easy to do it quickly, and certainly no one has succeeded in doing it quickly to date—we must understand the reasons for them.
I wish to spend a short time on those reasons before dealing with the specific points that have been put to me. I believe that there are two local reasons relating to the Northern region. The first, which was particularly emphasised by the hon. Member for Durham, who put it more eloquently and in a more learned way than I ever could, is the need for industrial adjustment from the declining heavy industries. That has been spelt out by others in the debate. It clearly takes time to bring in new industries in sufficient number and get them growing to compensate in any sense for the decline in employment caused by the decline in other industries. It is all very well for hon. Members to look askance at that, but they know that it has happened under several Governments, and not just under the present one. There is therefore a problem of time.
In addition, there is a different, modern problem, namely, that so often the new industries are capital-intensive, high technology industries which do not employ the same numbers as the industries of the past.
One or two hon. Gentlemen referred to this and it is important to understand it. It is crucial to the future economic benefit of the region that these new industries, capital-intensive and others, are attracted to the area.
The second problem is that of the infrastructure and location adjustment, because what was often a suitable location for old industries is not always the best for the new. We learn from new investors from overseas that they quite rightly look for factors other than the grants or other things that the Government offer. They look for the ports, the markets, the communications, and these will not always be in the particular areas, even within the Northern region, where the original industries grew up. This is a problem that we face, for example, in Consett, and I want to say a word or two about that later.
On the national side—and the hon. Member for Easington must face this—particularly in this increasingly competitive world, there is a need for us to adjust very rapidly to greater efficiency in our industries, to rid

ourselves of our old habits—the bad habits to which my hon. Friend the Minister of State referred. What we are facing, on top of that regional adjustment, is the fairly rapid adjustment of many industries have become uncompetitive at a time of world recession. This makes it very difficult to find the new jobs quickly enough to deal with the decline in the old.
There are some good signs in the national economy. As we see from the results of the Northern engineering industries, they are coping very successfully with the adjustments that they have had to make, but it does mean a reduction in numbers of jobs, because included in that is dealing with overmanning. This is a point that must be faced and taken into account in looking at the shifting balance in industry and the effect on jobs.
I think that the point was made very well by my hon. Friend the Member for Tynemouth, when he drew attention to the fact that areas like the Northern region throughout the whole of Western Europe, with the same types of industries, are facing exactly the same problems.

Mr. Campbell-Savours: But not the same levels of unemployment.

Mr. MacGregor: In many cases we have suffered because our industrial decline over 20 years or more has been faster than that of many of our competitors. We have to face the fact that we are having to deal with that rather faster decline, and therefore it is bound to have a more dramatic effect.
I part company from the hon. Member for Durham when he says—and I think that I am quoting his exact words—that since 1979 there has been considerable evidence to show that the Government's approach to regional aid was being turned on its backside. I think that that was the elegant phrase that he used. I refute that absolutely. We have first to look at the situation on regional development grants and assisted area status. The general point which I think is very important here is that the concentration on the areas of highest need effectively helps the Northern region more than most others. Most of the Northern region still has assisted area status when that has gone from most other parts of the country. There has been a general reduction from 44 per cent. to 25 per cent. in the country as a whole, yet 90 per cent. of the Northern region still has assisted area status of one sort or another and over 50 per cent. has special development area status. So that effective concentration really is directed to help the Northern region.
My hon. Friend the Minister of State also quoted figures of expenditure per head in regional aid and demonstrated just how much the Northern region benefited compared with other areas of the country. I am taking the past year—I say to the hon. Member for Easington, because he said that so much that had been done was catching up with the previous years' expenditure—and looking at what has been spent in the Northern region in the various forms of aid from the Government and from Europe. If the hon. Gentleman will look at the figures of Government spending in the Northern region as a proportion of aid nationally he will see that the remark that the approach to national aid had been turned on its backside is absolutely nonsensical.
In the past year the Northern region has received £122 million in regional development grants, which is 37 per cent. of the total for the whole country. Dealing with the


point about the English Industrial Estates Corporation, 70,000 people now employed in its factories are in the Northern region, which is about 75 per cent. of all employees of the corporation.
Since 1975, £128 million or 20 per cent. of the total funds available from the European regional fund has been spent in the Northern region. A total of 13 per cent. of the money available under YOP and £7·4 million or 25 per cent. of the total available under derelict land clearance programmes was spent in the Northern region last year. It cannot be said that the Government's regional aid policy has been turned on its head. By far the highest proportion of the aid available is concentrated on the Northern region.

Mr. Mark Hughes: The figures that the Minister has given total about £300 million—at the most. The amount spent on unemployment benefit in the North is £1·2 billion. To pay people to do nothing in the North is the Government's real sin.

Mr. MacGregor: That is a separate argument. I shall deal with it if I have time. I accept that unemployment in the Northern region is particularly high. We know the reasons for that. A high proportion of Government aid is concentrated on that region. It cannot be said that the regional aid programme has been stood on its head.
I agree with my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and my hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliot) that bringing inflation and interest rates down—the Government's central strategy—is crucial to the rebuilding of business confidence and is more important than anything else for the regeneration of the economy in the Northern region and elsewhere.
It is easy for Opposition Members to call for more public spending and to argue that that is the answer to the problems. The hon. Member for Easington was guilty of that. It is important to get the balance right. The more that public expenditure is pumped in all over the shop, the greater is Government spending and Government borrowing and the less are the chances of bringing down inflation and interest rates.
Pure public spending and Government assistance are not the answer. Many people accept that the Consett decision was right for the future health of the steel industry. I accept that the decision was tragic for the area. Many people acknowledge that the Government are doing all that they can to help. We are building a £13 million ongoing scheme for Consett. It includes small workshop units and 32 units involving 100,000 sq ft are under construction. Nineteen units covering 124,000 sq ft are vacant and 12 are reserved. New factories are being built to try to deal with the problem. Many inquiries have been made from small firms and that will provide a base. However, the basic difficulty is attracting the big United Kingdom or foreign companies with internationally mobile jobs.
Consett's main problem is its location. Government spending will not necessarily solve the problem. The Government are concentrating all resources on trying to build the estates and provide jobs. However, when Government direct industries they are often located in the wrong places for their products. That weakens the economy and the industries have to close. We have seen that happen elsewhere.
I should like to comment on overseas investment, and in doing so I may be able to rescue the hon. Member for Durham, who was unfairly criticised for some of the remarks that he made. I suspect that the hon. Gentleman welcomes overseas investment in the Northern region. The attraction of overseas companies is important to the Northern region. I recently had the pleasure of visiting Japan with the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), when we saw for ourselves that there was considerable interest in Britain. I know that at least one Japanese company in the Northern region has created many jobs. It has also brought with it new high technology and management. I therefore agree with those who have said that in today's increasingly international business environment it is important to do all that we can to attract these companies.
The problem is that many other countries and regions are trying to attract exactly the same investment. It is therefore important that there should be a positive attitude from the region, on top of all the other infrastructure benefits that it possesses. For example, it has ports, which were referred to by the hon. Member for Redcar (Mr. Tinn). It also has universities, which are important for new high technology firms. That was mentioned by my hon. Friend the Member for Newcastle upon Tyne, North. The region also enjoys good communications and high speed trains, to which my hon. Friend the Member for Tynemouth referred. At the end of the day, a positive attitude from the region will above all, attract such companies.
I recently had the pleasure of visiting West Germany with a trade union official from the Northern region. He did a splendid job in trying to overcome the resistance towards investing in Britain. I say that even though a German company is located in Newton Aycliffe. People in Germany acknowledge many of the attractions and believe that we have a good chance of pulling our economy round. However, they are still afraid of other things, such as our apparent bad industrial relations record. The more that we can do to overcome that problem by talking positively, the better for the region.
There is a four-month moratorium on regional development grant payments. That is part of the containment of public expenditure announced in the Budget. However, there are other administrative delays in clearing the grants, which I have tried to improve. The length of delay has come down considerably, and I hope that it will continue to improve.
I know that the hon. Member for Whitehaven (Dr. Cunningham) agrees that it is important to have stability in the regional grant aproach as well as in the areas themselves. There will be fluctuations from time to time in the relative levels of unemployment between different travel-to-work areas. However, to change them too quickly makes is difficult for industry to plan ahead with confidence. At present, both Berwick and Morpeth have levels of unemployment below the recognised levels for development areas. That brings me to the point raised by the hon. Member for Berwick-upon-Tweed (Mr. Beith). It is difficult to separate small pockets within a travel-to-work area, and say that they should have a certain type of status. Some anomalies will always exist at the borderline. It is therefore important to maintain stability. We have made it clear that if there are signs of long-term structural change in unemployment levels, we would be prepared again to review the status of such areas.
The hon. Member for Berwick-upon-Tweed referred to the level of unemployment benefits—as did the hon. Member for Durham—as against a massive public works programme. That sounds a simple concept in theory which appears to be attractive as a general approach. However, the problem is extremely complicated. Alas, I do not have time to deal with the matter tonight, but I assure the hon. Member for Berwick-upon-Tweed that we have looked carefully at this issue. If we tried to achieve what hon. Members seek without increasing overall Government spending in order to maintain the economic strategy, public expenditure would often be capital intensive and would, therefore, not create many jobs. Secondly, if we tried to create actual new jobs, the level of wages would often be a good deal higher than the level of unemployment benefit. Thus, once again, we would add to the level of Government spending. That is why there is such a heavy concentration within the Government on employment measures.
I apologise for being unable to deal with many of the other points that have been made. I shall endeavour to reply in writing. I simply have not had time to deal with many of the detailed points that have been raised.
One of the points that came out clearly during the debate and is extremely important is that the northern region, instead of constantly clamouring for more Government spending or drawing attention to the bad, derelict areas, should concentrate a great deal more on its advantages.
I am sure that my right hon. and learned Friend the Member for Hexham and others of my hon. Friends are right when they stress the importance of the Government continuing with their strategy of getting inflation and interest rates down, because, for the Northern region as elsewhere, it has been our higher levels of inflation—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

HOUSE OF COMMONS (MEMBERS' SALARIES)

Motion made,

That Mr. Joe Ashton, Mr. Hugh D. Brown, Sir Walter Clegg, Mr. George Cunningham, Mr. Joe Dean, Mr. Paul Dean, Mrs. Peggy Fenner, Mr. James Lamond, Mr. Michael Shaw, Mr. van Straubenzee, Mr. Peter Thomas, Mr. Stan Thorne and Mr. Mark Wolfson be members of the Select Committee on Members' Salaries.

That five be the quorum of the Committee.

That the Committee have power to send for persons, papers and records, and to report from time to time.

That the Committee have power to appoint persons with technical knowledge either to supply information which is not readily available or to elucidate matters of complexity within the Committee's orders of reference.—[Mr. Thompson.]

Hon. Members: Object.

Mr. Deputy Speaker: Objection taken.

Sandbach (Employment Prospects)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

10 pm

Mrs. Gwyneth Dunwoody: If, Mr. Deputy Speaker, you were to drive up the M1 from London and

then along the M6 towards my constituency, and turn off the main motorway at what is called the Sandbach exit, you would drive into a town which has a very special character of its own. Going quickly through it, Sandbach looks like a nice little market town, with a very pleasant open-air market, a funny old Victorian town hall, and a tiny shopping centre. It also has some antique Saxon crosses. But it is the home of two companies whose names have come to mean a great deal in engineering in this country.
The story of Sandbach and the problems that it is encountering at the present time are directly tied up with those companies. One of them is Fodens and the other is ERF. To any small boy—or even large boy—these names are directly connected with two very high quality vehicles which have been produced in my constituency for many years.
Fodens was founded in 1856 in order to manufacture agricultural equipment. In 1903, when it became Fodens Ltd., it was concentrating on steam-driven road vehicles. Since that time it has concentrated mainly on heavy transport. It has produced a number of very important vehicles which have featured not only in our defence budget but can be found on roads all over Britain. Therefore, obviously it is a very important firm.
Recently, when I started to look for the information that I wanted to bring before the House tonight, I turned tap a number of files, and I discovered that I had in my files, in a sense, the whole history of my own involvement with Sandbach and certainly with the employment position there.
When I became the Member for the constituency, Fodens was an extremely well-known firm. In 1975, it employed 3,000 people and it was the major employer in Sandbach. The other well-known household name, ERF, which was capable of producing many efficient vehicles which were sought after, employed fewer people but was still in a very successful sense a supplier of heavy vehicles.
What has happened over the years in both Fodens and ERF has not just affected the town; it has affected a great many jobs in the area. Originally, Fodens employed many skilled engineers, men and women. If there were problems of any kind, the work force rarely altered. It was exceedingly stable. When we look at the history of industrial disputes or of the development of new lines, we begin to realise that it is the very character of that work force that has in many instances created Fodens' reputation.
In some cases four generations have worked in the same factory. People were not only so used to working in Sandbach that they regarded it as normal for their children to follow them into apprenticeships; they had a relationship that meant that they rarely moved far from home for employment. Therefore, it is clear that what happens to Fodens affects Sandbach.
When I first came to the constituency Fodens was a working firm. It had many employees and appeared to be doing well in world markets. However, several management decisions were taken soon after I became the Member. They were to have far-reaching consequences which the firm did not realise at the time. A new line was created. A new factory unit was developed. There was a great deal of retooling and development. In 1973, there were considerable difficulties as a result of a change in the world fuel market. Fodens began to encounter difficulties. The line was still not working properly and there were


even new design difficulties with the new model. However, it looked as if everything would be all right, because the firm had a stable work force. Although there were problems from time to time, the company's future seemed fully assured.
In 1975, it was a considerable shock to be told by the management that the company was faced with financial difficulties. I was asked to visit the firm and was told that unless there was radical action within a short time the firm might not be able to meet its local wages bill. I asked the Department of Industry—under the Labour Government—for assistance. It was forthcoming. However, as it was a viable private firm and as the product had a bright future, the Government decided to underwrite the firm until it had obtained capital on the open market in the City.
Indeed, the Expenditure Committee asked Fodens to give evidence to the Committee. It presented a detailed memorandum, which set out not only the company's history and the way in which it had used its capital but its investment programme and the difficulties that had been encountered with both management and labour. Although Bill Foden, then managing director, said that strikes had affected the company, the company was careful to say that those strikes did not necessarily involve its work force. Fodens' rates of pay showed that some workers were receiving less money than comparable workers in other industries.
The firm fulfilled all the qualifications for the Conservative Government's new deal. Evidence was given to the Trade and Industry Sub-Committee of the Expenditure Committee on 19 February 1975. If the Minister wants information, he should consider the report, which is both detailed and informative. The City believed in that firm and it managed to raise cash in order to continue.
Why did the firm find itself in considerable difficulty soon after the Conservative Party came to power? The truth is that there has never been a high standard of management in the firm. The management has been full of good intentions. I acquit it of any deliberate desire to cause unemployment, but the situation in Sandbach shows that some of the outside factors that have caused the lorry industry problems were beyond Fodens' control. However, Fodens is definitely responsible for some of the factors that have led to the present situation.
At the end of last year Fodens Ltd. went into voluntary liquidation, with over 2,500 people on the books. Since that time the people of Sandbach have been faced with real problems. Sandbach has a smaller unemployment problem than elsewhere in the North-West but that is frightening to a community that has always been stable, that has never had a high rate of unemployment and has always been able to find jobs for its children It suffers a sort of culture shock when the basic, indeed the only, major firm in the area goes bankrupt.
When the latest employment figures were published the change was dramatic. On 13 March 1980, 214 males and 148 females were unemployed—just 362 people. By 12 March 1981, the figures had risen to 868 males and 288 females—a total of 1,156. There is little prospect of those engineers finding other employment in the area.
Originally, when Fodens seemed to be doing extremely well, other firms in the area made concentrated efforts to

reach agreement with Fodens to develop for the future. Many people would have liked to see Rolls-Royce and Fodens join together to make a more sensible unit, but Fodens issued leaflets which said:
Your Board's advice.
The offers are completely unacceptable.
Take no action.
Keep your company independent.
The truth was that it was not possible for the company to remain independent. It should have been prepared to come to some sort of agreement with Rolls-Royce because that would have helped Sandbach. It would have produced a better unit for the products and the spread of the products.
Today, with the closure of Fodens, the unemployment situation having been dramatically changed and ERF working a variety of two- or three-day weeks, Sandbach has been transformed. Many men and women are deeply concerned. Men in their fifties believe that they will never work again. Men are trying to find employment anywhere in the area, but they have discovered that south in the Potteries the jobs have disappeared and north in Crewe there are increasing problems.
Crewe has gone from 4 per cent. total unemployed on 17 March 1980 to 8·3 per cent. of the work force unemployed on 12 March 1981. That means that people who would normally have been able to consider work in engineering firms in the centre of my constituency—Rolls-Royce or the British Rail engineering works—do not have that alternative. All those factors have combined to create an atmosphere of great depression in Sandbach.
What future does the Minister foresee for the town? It is extraordinary that the Government are taking both Sandbach and Crewe out of the assisted area, so that they will lose support from the middle of this year. They will not be offered the sort of encouragement that firms seeking to develop would look for. Although Crewe has put an enormous amount of money into developing an industrial estate, it will not provide enough jobs for Crewe and Sandbach combined.
Congleton borough council plans to develop an industrial estate. Congleton will be faced with great difficulties when it tries to encourage people to set up there because there are no incentives and little hope of anyone obtaining support to enable them to offer employment to my constituents.
I could go on at length about what has happened to Sandbach. There have been difficulties over the payment of redundancy pay. The receiver has been helpful, but there are many people receiving social security benefits who have no employment and little hope.
Even the engineering training board is not certain that it will continue to get money from the Government to train apprentices. A sensible unit has been set up in what is now Sandbach Engineering, and was previously Fodens, but there is no long-term guarantee from the Government that they intend to continue giving money to the company.
All those factors are so important that I want the Minister to tell us what future he envisages. Sandbach has always been a stable, hard-working and balanced community. The general level of wages is not out of line and, indeed, is lower than levels in some other places.
The employment in Fodens and ERF has been destroyed by Government policies, including the high level of the pound, the considerable difficulty that both firms faced in overseas markets and the problems of cutbacks in defence contracts, because both firms were


capable of building good vehicles that had been used by the Armed Forces. The Government should take a degree of responsibility for those elements, and I want to know what they intend to do to create jobs. It will not be good enough for the Minister to say that there ought to be enough ways of absorbing the engineers in the area.
I have waited a number of weeks to raise this subject on the Floor of the House, and I am sorry that the Minister finds it necessary to draw my attention to the time that is passing. The time that is passing for my constituents is time that they want to spend in full employment. Until the Government are prepared to change their policies my constituents will find it exceedingly difficult to see any future for themselves or their children. I hope that the Minister will have time to answer the questions that I have put.

The Under-Secretary of State for Employment (Mr. Peter Morrison): The hon. Member for Crewe (Mrs. Dunwoody) is an adopted daughter of Cheshire, just as I am an adopted son. I drive up the M1 and the M6 through her constituency—often through Sandbach—on the way to my constituency, the City of Chester. Like her, I know Cheshire well. She knows her constituency better than I do, but I know parts of it, because I drive through it.
Sandbach falls within the Crewe travel-to-work area, where unemployment is 8·3 per cent. I do not dispute that that is a high level, but the hon. Lady was present for the previous debate on the problems of the Northern region and she heard her hon. Friends complaining about the employment prospects in that region. She will accept that the problems of Cheshire are not as great as those in the Northern region or even in the North-West generally—especially on Merseyside and in certain parts of Lancashire—or in the West Midlands.
Many of the hon. Lady's hon. Friends from other parts of the country are always crying for more. They want Government assistance and money. The hon. Lady has been a Member of the House longer than I have and she knows that over the years Governments have given way to cries of "We want more". They have reflated just at the moment when economic policy has been about to work. They have pushed money into the system. That has led, over a period, to higher inflation, which, in turn, has led to fewer job opportunities.
I believe that under this Government we are beginning to see the light at the end of the tunnel. There is a sign that we are on the upturn. Inflation is falling. Pay settlements are far more moderate than they have been in the past. The number of strikes in the last six months of 1980 was the lowest since the war. The number of days lost was the lowest since 1966.

Mrs. Dunwoody: What about Sandbach?

Mr. Morrison: I am coming to Sandbach. The hon. Lady made her points; I shall make mine.
Many firms are finding new markets. Many are more competitive. There has been the recent announcement of agreement reached on one of the largest export orders won by the United Kingdom—the sale to Hong Kong of a large coal-fired power station worth at least £550 million. That will help the North-West and, in turn, Sandbach.
I accept the points that the hon. Lady makes about Fodens. She said that she wished to raise the employment

prospects in Sandbach. I hope that she will look forward and not backwards. If we look backwards to 1850, there was no railway station in her constituency of Crewe. Yet, after 1855, when the railway station was built the employment prospects in her constituency, within 20 years, had become magnificent. It was a major, flourishing metropolis. The progress in those days—because the railways were not nationalised—was achieved thanks to private enterprise, the London North Western Railway.
As the hon. Lady knows, although she did not remind the House, a number of projects in the Crewe travel-to-work area have recently been announced. If they come to fruition, they will bring work to those living in the Sandbach area. Data Recording Instruments Ltd. is expanding—

Mrs. Dunwoody: It is at Winsford.

Mr. Morrison: It will bring prospects to the area.

Mrs. Dunwoody: Will the hon. Gentleman give way?

Mr. Morrison: No. I shall not give way. I listened with great interest to what she said.

Mrs. Dunwoody: Then answer.

Mr. Morrison: Data Recording Instruments Ltd. of Crewe is expanding and, together with Control Data Corporation of America, is establishing a new cornpany, United Peripherals Ltd., to manufacture computer equipment. This is expected to create 450 new jobs. The hon. Lady may not like good news, but it is true.
Bel-Tyne Co. Ltd. has opened a 12,000 sq ft machine tool manufacturing operation at Crewe Gates Farm, which will employ 60 people. Paccar, the American group, has purchased Fodens of Sandbach and renamed the business Sandbach Engineering, retaining 350 of the former workers. The new owners, I understand, are examining the prospects for new engineering products to be made at Sandbach works. That is the future.
The hon. Lady can look backwards. I assure her that if she understands the Cheshire people, as I understand them, she will know that they are looking forward. I hope that after a while, when she thinks about it, she will look forward, too.
Despite the fact that the Government are following a good housekeeping policy, we have given financial assistance since May 1979 worth £778,000 under section 7 of the Industry Act for 10 projects in the Crewe travel-to-work area involving a total estimated investment of nearly £12 million. That comes from the Government who the hon. Lady claims do not care. The fact is that the Government, as well as following a good housekeeping policy, do care. I do not expect the hon. Lady, as a Member of the Labour Party, to agree, but, at the end of the day, employment prospects in Sandbach will depend—

Mrs. Dunwoody: They are very poor.

Mr. Morrison: —on the vitality and competitiveness of industry and commerce in the area and on the degree of co-operation between managements and work force.

Mr. John Bruce-Gardyne: As my constituency virtually surrounds Sandbach I naturally share the hon. Lady's concern about the employment prospects in the town and its surrounding area. The hon. Lady has enumerated several items of Government help


and support. Is it not true also that the local authorities have a vital part to play, and that by setting a modest rise in the rate burden Cheshire has made a major contribution to the encouragement of new industry while others are raising rates to a grotesque level?

Mrs. Dunwoody: On a point of order, Mr. Deputy Speaker. Would it be possible for the Minister to continue this debate later? This is my Adjournment debate, and I think it is normal for hon. Members to ask when they wish to intervene. Time has been wasted.

Mr. Bruce-Gardyne: I asked the hon. Lady's permission, as she knows.

Mr. Morrison: My hon. Friend anticipated what I was about to say. I was about to say that it depends not just on the personalities and the vitality of the particular community but on how local government is run.
As my hon. Friend aptly remarked, the way to attract industry and investors is to run local government as tightly as possible, given that it must provide the right services. The Cheshire county council's rate increase this year has been pegged to 3 per cent. By any stretch of the imagination that is a significant victory for the Conservative-controlled county council. I know that the hon. Lady feels just as strongly as I do about unemployment in Sandbach, and I am sure that she will agree that future investors—industrialists looking for factories and factory sites—will be more likely to look in Sandbach or Crewe than in other parts of the country where there may be a Labour-controlled council.
I reminded the hon. Lady that in Cheshire the Labour Party does not intend to follow entirely the same policy on rates.

Mrs. Dunwoody: What about Sandbach?

Mr. Morrison: I am telling the hon. Lady about Sandbach. I hope that she will be able to dissociate herself from the Labour Party's manifesto in Cheshire which says:

we do not pretend that we can provide the services we think are wanted by the people of Cheshire without setting adequate rate levies.
That means substantial increases in rates.
That will harm not only householders in Cheshire, but potential industrialists. It will mean that fewer jobs will be available for her constituents. That is what will happen. [Interruption.] The hon. Lady may intervene from a sedentary position, but what I say is true.
The crucial need is to tackle the root causes of rising unemployment. The main one—the current recession—is partly due to the upsurge in oil prices and is therefore largely outside this country's control, but the fact remains that this Government care and are doing something to help.
In Sandbach, about 60 to 70 opportunities are provided under the youth opportunities programme. In the past, a high proportion of trainees involved in work experience on employers' premises have been offered permanent jobs. The hon. Lady may not like that, but it is true. Opportunities are also available on project-based work experience and community project schemes in the area. I take this opportunity publicly to acknowledge the great help given by the local authorities in Cheshire and Congleton in sponsoring schemes.
The hon. Lady talked about training. That is a matter for which I am responsible, and about which I am very concerned. Training can help many to improve their individual employment prospects. Within daily travelling distance of Sandbach there are still centres at Runcorn and Hanley, and the Manpower Services Commission's training services division aims to offer almost 500 training places for adults in its Warrington district in 1981–82, and make available 1,300 opportunities—

The Question having been proposed at Ten o' clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.